LatinFinance - May/June 2015 - 6

NEWS
LOANS

After Brazilian corporates pave the way, most loans
bankers say activity in the loans market is to set to pick up.
By Patrick Ferguson

A revival, of sorts
The loans market is gearing up
for more, larger deals, loans
bankers say, after activity
picked up slightly toward the
end of the first quarter.
In late April, two Brazilian
corporates were close to
closing some of the largest
loans of the year. Miner Vale
was in the market with a $3
billion loan, the biggest credit
this year, while paper and pulp
company Suzano Papel e
Celulose was seeking to close
a $500 million term loan.
Despite the activity, the
loans market is still in low gear.
Regional loans totaled $10.7
billion in the first quarter, a
33% decrease year on year,
and the lowest quarterly
activity on record, according
to data from Dealogic.
Nonetheless, the market was
giving Brazilian companies a
chance - a country that has
been off the table when it
comes to bonds.
Vale and Suzano joined
Raizen Energia and Usina
de A├žucar Santa Terezinha
as Brazilian companies that
have taken the lion's share of
syndicated loans so far this
year. Raizen closed a $735
million deal, split between
a five-year revolving credit
facility and a five-year term
loan in March, locking in
lower pricing than a year ago,
despite weaker economic
forecasts in the country.
Ethanol and sugar producer
Santa Terezinha bumped up
a four-year, pre-export term

6 L ATINFINA NCE.COM - May/June 2015

loan to $200 million, from
$150 million, after banks
showed strong support. The
company paid a 50 basis
point premium compared to a
similarly-structured five-year
loan it took out a year earlier.
The higher pricing comes as
a drought in Brazil has hurt
agricultural production.
"There is a lot of liquidity
and there are issues going on
in Brazil, but in the end they
still have good companies,"
one loans market source said.
Even Petrobras found
appetite among lenders. The
state oil company has been
locked out of the cross-border
bond market for months as
corruption investigations
ramp up, and a long delay in
publishing audited financial
results for the third and fourth
quarters of 2014 had many
creditors' nerves frayed.
Nonetheless, a few days
before it ultimately released
its financial statements, it said
it had agreed financing worth
9.5 billion reais (around $3.2
billion) with three Brazilian
banks.
Banco do Brasil agreed
a 4.5 billion real six-year
export note to Petrobras
subsidiary BR Distribuidora.
Caixa Economica Federal
lent 2 billion reais through
a five-year standby facility,
and Bradesco, 3 billion reais
on similar terms. The staterun oil company also signed
a $3 billion, 10-year sale
and leaseback agreement

Loans rank by volume, year to April 30
Europeans on top
Rank
1
2
3
4
5
6
7
8
9
10

Bookrunner
BBVA
BNP Paribas
Mizuho
HSBC
JPMorgan
Credit Agricole CIB
Mitsubishi UFJ
Natixis
Sumitomo Mitsui
SocGen CIB

No. Deals
4
5
5
4
3
4
3
3
2
2

12,870

Total

Value ($m)
1,433
1,280
1,132
996
946
762
708
633
608
578

25

Source: Dealogic

with Standard Chartered for
production platforms.
Outside Brazil, Canacol
Energy Colombia closed a
$200 million 4.5-year term
loan, squeezing the spread
over Libor by 25 basis points
versus a similar deal a year ago.
Colombia's Cementos Argos
was in talks with lenders to
amend the price and tenor on
a $600 million 2019 syndicated
facility. Mexico's Bio Pappel
was heard to command strong
interest for a $255 million term,

For daily updates on
loans market, visit:
latinfinance.com

which the paper maker plans
to use to pre-pay a 2016 bond.
Panama's Banco General
was preparing to close a $240
million loan that pays 140 basis
points over Libor.
Loans bankers say they are
working on proposals and say
they have further deals in the
pipeline that may be coming
to market over the following
weeks. Project finance
transactions and refinancings
of existing deals are likely to
dominate. LF

LatinFinance's Daily Brief gives
you the latest news and updates on
Latin America's syndicated loans
market. Sign up at latinfinance.com


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LatinFinance - May/June 2015

Table of Contents for the Digital Edition of LatinFinance - May/June 2015

Contents
LatinFinance - May/June 2015 - Cover1
LatinFinance - May/June 2015 - Cover2
LatinFinance - May/June 2015 - Contents
LatinFinance - May/June 2015 - 2
LatinFinance - May/June 2015 - 3
LatinFinance - May/June 2015 - 4
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