New York-based BlueOrchard Finance, which recently teamed up with multilaterals MIF, OPIC and IIC to establish a $250m Microfinance Growth Facility to make small loans in the region, could expand in LatAm, says MD Ann J. Miles. “Over time we will consider increasing [our exposure] to LatAm in proportion to fund allocations,” she tells LatinFinance. “We are always examining opportunities to expand in LatAm and are working on another initiative with smaller microfinance institutions in LatAm, Africa and Asia,” she adds, explaining that the average size of loans her institution offers is $1,000-$1,500. Another company focused on microfinance, Bangladesh-based Grameen Bank, is also expanding in LatAm. It recently launched a microfinance bank, Grameen Carso, in Mexico with Mexican tycoon Carlos Slim. Vidar Jorgensen, president of Grameen America, tells LatinFinance that the Mexican bank is starting out offering $5m in grants and $40m in loans. Grameen, which also has operations in Guatemala and Costa Rica, might also expand to other parts of the region. “Other countries in LatAm have expressed interest,” he says. Another bank that has delved into microfinance is Banco del Credito de Peru, which recently purchased Financiera Edyficar from humanitarian organization CARE for about $100m in cash.
Category: Loans
Unidas Privately Places 1-Year Debt
Brazilian car rental company Unidas has raised BRL127m-equivalent through domestic and international private debt placements. It sold $28m in 1-year bonds paying Libor plus 5.5% to a small group of investors, according to an investor relations official. In the domestic market, it likewise sold BRL78m in 1-year notes at DI plus 6.5% to another small group of investors. BES Investimento and Banif managed both sales, which will repay $60m outstanding dollar bonds, Unidas says. Unidas plans to refinance the current placement within a year at a longer tenor, the official says.
Caribbean Loans Slump
Loans to Caribbean companies for the first seven months have dropped by around 50% compared to the same period in 2008. Demand and supply remain weak.
Su Casita at Risk of Downgrade
Moody’s has put the Baa1 rating of Hipotecaria Su Casita’s Construction Loan Trust Variable Funding Notes, series 2005-1 cross-border securitization on review for possible downgrade. The agency says that challenging trends in the Mexican home construction sector are more severe for transactions that are still in the revolving stage and that have concentrations of housing developments targeting the higher-end and tourist sectors. These challenging trends, says Moody’s, increase extension risk, or the risk that some construction loans may not fully amortize by the transaction’s final maturity date due to the longer construction and sales cycles, which increases the risk of losses to investors. Three other transactions issued locally (including Su Casita’s HSCCB08 and Credito Inmobiliario’s CICB08 and CICB06) were also placed on review for possible downgrade in a separate rating action, Moody’s adds.
Telmex Prepays $1.3bn Loan
Telmex says it has prepaid a $1.3bn loan due October 20. The 3-year tranche was signed in August 2006 and paid Libor plus 20bp. It was part of a $3bn package that also included a $1bn 5-year loan and $700m 7-year loan, led by ABN AMRO, BBVA and HSBC. Telmex had MXP63.28bn in long-term debt as of June.
Loan Volume Falls Sharply
Loan activity in LatAm and the Caribbean is down sharply year-to-date compared to the same period in 2008. According to Dealogic data, loan volume to the region is down 53.6%. While YTD only 52 loans worth $18.9bn have been announced, as of July 28 of last year, 112 loans worth $29.1bn had been made public. The drop is loan value between the same periods is 35.1%.
Argentines Test Local DCM
Aluminum producer Aluar has placed $50m in 2014 bonds at Libor plus 300bp on Argentina’s domestic market, according to brokers managing the sale. The bonds feature an 18-month grace period, and a mechanism to adjust the coupon at each interest rate period based on the price of aluminum, with investors guaranteed minimum all-in return of 6.5%. Proceeds from the sale, rated A+/Aa3 on a national scale, will fund investments and refinance existing debt. Citi and SBS managed the transaction, the first from a $300m shelf. Aluar is also preparing to raise funds through a local share offering of up to ARP500m. Separately, turbine producer Industrias Metalurgicas Pescarmona (IMPSA) has placed ARP200m ($53m) in 2012 bonds at the Badlar private rate plus 6.75%. Proceeds from the A/BBB+ deal will fund investments. Banco Macro managed that sale.
Bimbo Pares $135m from Acquisition Loan
Bimbo has prepaid $135m from a $900m loan supporting last year’s acquisition of Weston Foods’ US operations. The loan, due 2012, pays Libor/TIIE plus 250bp, and was part of a package signed in January that also includes a $800m 5-year loan at Libor plus 300bp and a $600m bridge. The Mexican bread maker repaid the bridge earlier this month using proceeds from a MXP10bn domestic bond sale. Citi, BBVA, Bank of America, HSBC, ING and Santander all served as lenders and managers of the domestic bond sale.
Etesco Cements Platform Loan
Drillship sponsor Etesco has raised $650m for a new 10-year Petrobras drillship concession. The deal includes a $380m commercial tranche with a 2.5-year construction period at Libor plus 325bp and an abbreviated post-completion period of 6 years at Libor plus 300bp, say project bankers on the deal. Challenging market conditions led Etesco to opt for a shorter post-completion period, which means it will need to refinance the facility within the coming several years in order to guarantee funds for the full 10-year contract. The commercial portion was split between 4 bookrunners and 2 MLAs. SMBC, Mizuho, Tokyo-Mitsubishi and ING led the deal, each taking tickets of around $72m. MLAs Standard Chartered and Societe Generale joined the group later with $50m tickets, says a banker on the deal. A $270m ECA tranche financed by Norway’s Export Finance and guaranteed by the same country’s credit insurer Giek makes up the remainder of the facility. Pricing on the ECA tranche is heard to be a little under the commercial portion, paying a fixed rate. The funding will be disbursed by the end of the year, when the $160m or so in equity financing Etesco has contributed to the project has been spent, say bankers close to the process. The deal, in the works for close to 12 months, strikes an encouraging tone for a challenged part of the LatAm project finance market. Odebrecht’s $850m 10-year drillship project financing has been struggling to bring in commitments, though a recent adjustment to price has given the transaction momentum and bankers away from the deal say they believe it will close eventually. Schahin has a concession similar in size to Odebrecht that it will look to finance in the loan market too, either at the end of this year or in 2010.
Interbank Closes MT100
Peru’s Interbank has priced a $121.2m 7-year final, 5-year average MT100 at 425bp over 3-month Libor, in line with expectations, according to a banker on it. The deal was sold two thirds in Peru and the rest offshore in a simultaneous placement, exploiting price tension with local investors who are used to tighter levels, adds the banker. Locals were apparently allowed to treat the deal as a domestic issue for regulatory purposes, increasing the potential sol-denominated bid. Target size was $100m-$150m but the deal was capped to minimize spread. Deutsche was sole lead on the BBB rated issue. The transaction was initially expected in March, to consist of a $120m 6-year and $30m 10-year at 150bp over Peru 5-year CDS. At recent levels, Interbank’s all-in cost was expected to land in the mid to low 400s. In late March, Bradesco placed a $100m DPR via WestLB. Pricing came in the mid to low 200bps area over Libor, say people familiar with the terms. Bankers are eyeing new markets for DPRs, including Chile and Mexico. MT100s are done either on a biltateral basis with an underwriter, or placed with a select group of institutional investors, such as insurance companies and multilaterals. More structured supply is anticipated from Mexico soon.