LatinFinance - November/December 2014 - 58

a sharp slowdown in 2014, in part due to the
impact on the mining industry of slowing
Chinese growth.
But Chilean firms expanding elsewhere
in Latin America, such as retailers, will still
need to raise capital and pay for advisory
services, he says. He also points to the
government's push for investment in
energy as a likely source of continued strong
deal flow.
A much-publicized market-manipulation
scandal this year has not helped equity
issuance. Over the longer term, Chilean
private-sector pension funds' allocation
to local equity (now at an all-time low
as a percentage of their assets under
management) is a new brake on stock
offerings.
Firms with convincing investment
plans can still issue, according to Muñoz,
but drawing international investors is
increasingly crucial, especially for deals
above $200 million. Banco de Chile's
share sale and a $294 million offering from
dual-listed Chilean drinks firm CCU fit this
model.
As pension funds' international
allocations rise, equity houses with
stronger international links have growing
advantages. That goes for M&A, also, where
Muñoz says he expects robust revenues to
continue.
"Chilean groups are more receptive
to selling," he says. At the same time,
international groups remain keen to enter
a mature but still fast-growing economy,
according to Muñoz.
Banchile-Citi's share of the M&A advisory
wallet rose over the period of these awards,
according to Dealogic. One key deal on
which it advised saw UK healthcare group

BUPA take a stake in local healthcare group
CruzBlanca. LF

MULTILATERAL DEVELOPMENT BANK
OF THE YEAR

INTER-AMERICAN
DEVELOPMENT BANK

Plans to build on success in
encouraging private investment into infrastructure
projects, with the "transformational" creation of a
dedicated new entity
A slowdown in the speed of Chinese
growth, a drop in commodity prices, and an
expected rise in US interest rates are making
it tougher for Latin America to continue
recent strong economic expansion. The
reversal of external fortunes is underlining
the region's need to boost productivity.
The Inter-American Development Bank
turned its focus to productivity around four
years ago, anticipating this less favorable
environment, says Luis Alberto Moreno,
the bank's president. "Productivity growth
in Latin America has been flat for the
past 20 years," says Moreno. "Without
improvements in productivity, Latin
America will not see a pick-up in potential
growth."
INITIATIVE: IDB President Luis Alberto
Moreno hopes a new private-sector
financing unit will help private investment
in public goods

The focus has led to a push in a range
of areas at the bank, says Moreno. That
includes investment in human capital -
through education - and infrastructure, as
well as a drive for science and technology
innovation. The bank is also working
on regional integration of trade and
infrastructure, helping smaller companies
cross borders, as well as larger companies
already operating regionally to expand
further.
In 2013, the bank approved 168 projects.
Its disbursements reached $11.2 billion, its
second highest after a record in 2009, when
it took a counter-cyclical role following the
global financial crisis. Over the period of
these awards, it lent money to everything
from water and sewage projects in Ecuador,
to health projects in the Dominican
Republic, tax reform in Jamaica and
irrigation in Bolivia. It also got approval to
lend and issue bonds in Brazilian reais.
The IDB was involved in two deals that
won LatinFinance 2014 Infrastructure
Finance Awards. It teamed up with Brazil's
BNDES and local development bank Cofide
on a $774 million project financing for
Peru's Empresa de Generación Huallaga
hydroelectric plant. And it led an A/B loan
for a hydroelectric project on Costa Rica's
Reventazón River which revived an old
structure to sell the $135 million B tranche
to international institutional investors.
Both transactions fitted a pillar of the
bank's strategy, which is to help private
investment in projects, Moreno says. "The
participation of the IDB is a seal of approval
for projects, which allows for other private
sector lenders to come in," he says. "That's
the kind of rainmaker capability that the
bank has."
This is also the role the bank hopes to
play more frequently through a new entity
it is preparing, to focus exclusively on
non-sovereign projects - akin to the World
Bank's private-sector arm, the International

©REUTERS

LUIS ALBERTO MORENO
INTER-AMERICAN DEVELOPMENT BANK

58 LATINFINANCE.COM - November/December 2014

"THE PARTICIPATION
OF THE IDB IS A SEAL
OF APPROVAL FOR
PROJECTS, WHICH
ALLOWS FOR OTHER
PRIVATE SECTOR
LENDERS TO COME IN"


http://www.LATINFINANCE.COM

LatinFinance - November/December 2014

Table of Contents for the Digital Edition of LatinFinance - November/December 2014

Contents
LatinFinance - November/December 2014 - Cover1
LatinFinance - November/December 2014 - Cover2
LatinFinance - November/December 2014 - Contents
LatinFinance - November/December 2014 - 2
LatinFinance - November/December 2014 - 3
LatinFinance - November/December 2014 - 4
LatinFinance - November/December 2014 - 5
LatinFinance - November/December 2014 - 6
LatinFinance - November/December 2014 - 7
LatinFinance - November/December 2014 - 8
LatinFinance - November/December 2014 - 9
LatinFinance - November/December 2014 - 10
LatinFinance - November/December 2014 - 11
LatinFinance - November/December 2014 - 12
LatinFinance - November/December 2014 - 13
LatinFinance - November/December 2014 - 14
LatinFinance - November/December 2014 - 15
LatinFinance - November/December 2014 - 16
LatinFinance - November/December 2014 - 17
LatinFinance - November/December 2014 - 18
LatinFinance - November/December 2014 - 19
LatinFinance - November/December 2014 - 20
LatinFinance - November/December 2014 - 21
LatinFinance - November/December 2014 - 22
LatinFinance - November/December 2014 - 23
LatinFinance - November/December 2014 - 24
LatinFinance - November/December 2014 - 25
LatinFinance - November/December 2014 - 26
LatinFinance - November/December 2014 - 27
LatinFinance - November/December 2014 - 28
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LatinFinance - November/December 2014 - 31
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LatinFinance - November/December 2014 - 60
LatinFinance - November/December 2014 - Cover3
LatinFinance - November/December 2014 - Cover4
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