LatinFinance - May/June 2016 - 7

NEWS
LOANS

Loans and project financings have had a slow start to the year,
but an infrastructure pipeline is building. By Jennifer P. Roig

Dry season
The corporate loans market
remained in low-gear during
March and April. First quarter
numbers showed that banks
lent $5.1bn to Latin American
corporates in the first quarter,
roughly a third of that
disbursed in the same period
in 2015, according to data from
Dealogic. Capital markets
volatility and Brazilian turmoil
have contributed to a very thin
pipeline of deals.
"Brazil was half the market,
and now it's very difficult to get
business done there," a banker
says.
"The Brazilian borrowers
that are coming to the loans
market are finding out that
tenors are shrinking," says
another. "Where it was possible
for them to get a five-year,
now the offer is a three-year
deal, and credit committees
are taking longer to assess the
terms."
Elsewhere, lenders still
look favorably to clients from
Mexico, Colombia, Peru and
Chile.
A loan to Axtel underscores
lenders' openness to blue-chips.
The Mexican telco upsized
a syndicated loan to $835m,
having initially sought $750m.
Sixteen banks participated in
the dual-currency transaction
that included a $585m five-year
portion priced at 250 basis
points over Libor and a pesodenominated $250m three-year
part at 225 basis points over
TIIE.
Meanwhile, McDonald's
franchisee Arcos Dorados

signed a four-year 614m real
($167m) deal with five lenders,
paying 450 basis points over
Libor. The deal securitizes
receivables from credit and
debit card sales at restaurants
managed by its Brazilian
Åsubsidiary.
New deals have come to the
market in the past two months.
Panama's Global Bank has
launched a syndication for
a $104m dual-tranche loan.
Mexican Grupo R is seeking
a $317m 7.75-year loan and
hired BBVA, HSBC, Sabadell
and Santander to lead the
syndication. Brazil's electric
utility CPFL Energia is aiming
at a $200m five-year loan.

Slow times

The project finance market
has been subdued this year,
although bankers are at least
optimistic about the pipeline.
Mexico, Chile, Central America
and Colombia have important
infrastructure portfolios to
push forward.
The scarce activity has
triggered competition among
banks. Japanese lenders are
thriving in this environment,
able to provide sweeter terms
and be more aggressive as
financial advisors and lenders,
a banker says.
Colombian highway deals,
part of the 4G infrastructure
development program, have
been approaching financial
closures.
After completing a financing
package for Autopista
Conexión Pacífico 3, the

Loans rank by volume, year to April 27
Citi keeps lead
Rank
1
2
3
4
5
6
7
8
8
10

Bookrunner
Citi
Mizuho
Sumitomo Mitsui
Itaú BBA
Scotiabank
Mitsubishi UFJ
Santander
GFNorte
BBVA
JPMorgan
Total

Colombian and Costa Rican
developers Mario Alberto
Huertas and Meco are moving
ahead with the financing
of two other toll roads, the
Girardot-Honda-Puerto
Salgar highway and the
Cartagena-Barranquilla road.
Concessionaire Covipacifico
is also negotiating terms for
the financing of the Pacífico
1 project and Autopistas del
Nordeste is working for the
funding of the Conexión Norte
highway.
In Mexico, developer
Fermaca is understood to be
negotiating the financing for
two natural gas pipelines.
Meanwhile in Brazil, a joint
venture comprising local
agricultural trader Fiagril and
US-based agribusiness Summit
Agricultural Group signed
a $50m loan from US ag-tech
developer Midwest Oilseeds
Global to fund the first corn
ethanol plant in the country.
In Chile, Aela Energía,
formed by UK companies

Value ($m)
623
367
285
282
250
200
178
130
130
71

# Deals
4
3
5
2
2
1
2
2
2
1

7,945

32

Actis (60%) and Mainstream
Renewable Power (40%) is
seeking up to $600 million
to fund two wind farms.
Additionally, two hospitals in
public-private partnership in
Santiago are seeking funds.
Hospital del Salvador is
targeting roughly $300m in
local currency and Hospital
Félix Bulnes is raising the
equivalent of $250m.
However, the presence of
Brazilian builder Odebrecht in
several concessions is raising
concerns and delaying financial
closures. Odebrecht Latinvest
announced that it is looking to
sell its stake in Peruvian natural
gas pipeline project Gasoducto
Sur Peruano and hydroelectric
Chaglla. As well, the financing
to the second line of Panama
City's metro system has stalled
and the project to recover and
improve the navigability of the
Magdalena River in Colombia
is at risk, as consortium
Navelena is majority owned by
Odebrecht. LF
May/June 2016 - L ATINFINA NCE.COM 7
http://www.LATINFINANCE.COM
Table of Contents for the Digital Edition of LatinFinance - May/June 2016
