LatinFinance - July/August 2016 - 40

CORPORATE WITH BEST CAPITAL
MARKETS STRATEGY: CENTRAL
AMERICA AND CARIBBEAN

AES MCAC
Sound relationships with
regional and international
lenders paved the way for
a series of successful
transactions
Volatile commodity prices and
inconsistent weather conditions made
operations tough for AES Mexico Central
America and Caribbean (AES MCAC).
The company's ambitious financing
plans in 2015 came after a series of
unexpected hurdles, including little
rainfall the previous year and restrictions
on a saturated transmission line.   
"It was like having a fire on one side of
the house, but there was no bucket big
enough to carry water from one side of
the house to the other," says Nicolas van
Tienhoven, regional director of treasury
and finance for AES MCAC.
"Oil prices didn't help either, so it was
the perfect storm of everything we didn't
want happening at once."  
The company overcame the obstacles,
completing cross-border bond deals,
liability management exercises and
syndicated loans. Its handling of the
challenges helped AES MCAC stand out in
the Corporate with Best Capital Markets
Strategy: Central America and Caribbean
category.
AES MCAC drew on working capital
facilities from local and international
banks which worked with the company
despite the tough conditions.
After a solid first quarter last year, the
company's Panamanian unit AES Panamá
anticipated an upcoming maturity
with a liability management exercise. It
bought back more than 70% of its 6.35%
2016 bond and issued a 6% $300 million
2022 bond at par around the same time.
Panama's Banco General and Deutsche
Bank, the lead managers, tightened
pricing after initial price thoughts were
cited in the mid-6% range.
"We issued the AES Panamá bond in a
good market," van Tienhoven says. "The
order book was almost $1 billion and now

40 LATINFINANCE.COM - July/August 2016

NICOLAS VAN TIENHOVEN, AES MCAC

"IT WAS LIKE HAVING
A FIRE ON ONE SIDE
OF THE HOUSE, BUT
THERE WAS NO
BUCKET BIG ENOUGH
TO CARRY WATER
FROM ONE SIDE OF
THE HOUSE TO THE
OTHER"

Dominicana to call its 9.5% 2020 bond. In
doing so, it saved around $1 million in debt
service costs, van Tienhoven says.
"These [9.5% 2020 notes] had been
issued five years ago when the company
was in a different state and had a high
coupon, so it was important to call them,"
he says. "These local and regional banks in
just four weeks put a term sheet together
and syndicated the loan to 13 other banks
and this allowed us to buy back the
bonds."
The company pocketed two other
transactions when it packaged $242
million of receivables from distribution
companies in the Dominican Republic and
within two weeks sold the entire amount
to investors. Later in the year, it put in
place a $115 million committed facility for
AES Dominicana that was provided by
Scotiabank.
Looking ahead, van Tienhoven says the
company's growth and investments lie
in gas and renewables. AES has a healthy
project pipeline in all countries under
MCAC's watch, moving in a direction of
cleaner, sustainable energy, and away
from coal. LF

CORPORATE WITH THE BEST CAPITAL
MARKETS STRATEGY: BRAZIL

Fibria

they have traded nicely in the secondary
market.
"To take out the 2016 maturing bond
we had to do a consent solicitation, we
needed 50% of noteholders to settle
their notes and we got past the required
amount easily," he says. "Bond investors
understood our story and most that
tendered the bonds ended up coming in
the new issue."
Another bold move was a switch
from bond to loan financing at AES
Dominicana, the Dominican Republic arm
of AES MCAC. Following the AES Panamá
issue, AES Dominicana planned to call its
9.5% 2020 bond in November last year.
Leveraging solid relationships with
local and regional lenders, the company
mandated Panamanian trade bank
Bladex and Banco Popular Dominicana
to execute a two-year term loan. The
resulting $250 million deal enabled AES

Brazil's Fibria has funded a
$2.7 billion plant expansion
and other projects, despite
headwinds in the country's
debt capital markets
In Brazil's debt capital markets, one
instrument has held the attention of
investors - agribusiness receivables
certificates called CRAs.
Local pulp and paper producer Fibria
Celulose has sold two CRAs so far: a
675 million real ($208 million) six-year
instrument in October, and a dual-tranche
issue for 1.35 billion reais this year, the
largest ever CRA deal in the Brazilian
market.
The October transaction was an integral
part of Fibria's plans to finance an 8.7
billion-real plant expansion project and
helped the company to capture the award
for the Corporate with the Best Capital
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