LatinFinance - July/August 2015 - 5

NEWS
LOANS

Borrowers secure larger deals, but fewer corporates come
to the market as gears shift toward project finance.
By Patrick Ferguson

Finding favor
The loans market slowed
in May and June after
bookrunners wrapped some
of the largest deals of the
year in the beginning of the
second quarter. In early July,
as chief executives prepared
for summer vacations, loans
bankers said that project
finance was gearing up in Latin
America.
Vale, a Brazilian metal
producer, closed a $3 billion,
five-year loan. Bookrunners
BNP Paribas, Citi, Crédit
Agricole and SMBC structured
the transaction with the
interest rate, 65 basis points
over Libor, tied to a leverage
grid. More than two dozen
banks put in north of $4 billion
of commitments for the credit,
which was the second largest
of the year, following Pemex's
$5.25 billion dual-tranche loan
syndicated in January and
February.
Shortly after Vale secured
the loan, the company struck
deal with the Industrial and
Commercial Bank of China for
up to an additional $4 billion in
financing, which could come
as syndicated loans, bilateral
loans and trade finance.
Brazil's Suzano Papel
e Celulose closed a $600
million pre-export loan in
May. The loan had an interest
rate of 200 basis points over
Libor, which was also tied
to ratings grid. Banks were
heard to lower pricing by
20 basis points and increase
the loan from $500 million

during negotiations. The
transaction arrived at a time
when Brazilian corporates
were still largely barred
from the international bond
market because of Petrobras'
pending write-down of
bribery and a drought in Brazil
that damaged agricultural
production.
In early July, fellow
Brazilian paper maker Klabin
was in talks with banks to
close a $200 million club loan,
and Votorantim Cimentos
and Votorantim Industrial
were preparing to sign off on
$700 million and $500 million
revolving credits with more
than a dozen banks.
Mexico's Bio Pappel
wrapped a $255 million loan,
which the company used to
acquire competitor Scribe
and pay off a bond maturing
in August 2016. The dualtranche deal has interest
rates of 5% and 450 basis
points over Libor. After the
company paid off the bond
and finished the acquisition,
Fitch upgraded the corporate,
citing a stronger track record
in debt repayment. Bio Pappel
has failed to pay two coupons
since 2000.
During the time period,
Panama's Banco General also
secured a $240 million loan
and Trinidad Cement set the
interest rate for a $245 million,
five-year loan to refinance a
nine-month bridge loan that
was closed in May. Mexico's
Crédito Real locked in a $100

Loans rank by volume, year to June 30
French banks step up
Rank
1
2
3
4
5
6
7
8
9
10

Bookrunner
BNP Paribas
Citi
Crédit Agricole CIB
BBVA
Sumitomo Mitsui
HSBC
JPMorgan
Mizuho
BofA Merrill Lynch
Natixis
Total

Value ($m)
2,380
1,551
1,512
1,478
1,358
1,296
1,141
1,132
755
713

No. Deals
8
7
5
5
3
6
5
5
5
4

21,253

43

Source: Dealogic

million, two-year amortizing
loan, which carries an interest
rate of 610 basis points over
Libor. Sole bookrunner Credit
Suisse garnered tickets from
around 10 banks from the US,
Costa Rica and Panama in the
syndication.
Finally, Empreas AquaChile
was heard to be in the final
stages of closing $290 million,
1.5-year bullet loan to refinance
a deal syndicated in 2011.

Project finance pickup
Loan activity in the region
has slowed this year, in part
because of lower economic
growth forecasts in the region
and already well-capitalized
corporates, loans bankers say.
At the same the demand for
project finance facilities has
increased, bankers say.
In May, Colombia's
Operadora Aeroportuaria

Internacional (OPAIN)
closed a $500 million club
loan to refinance a 2013 line
of credit. OPAIN operates
and maintains the El Dorado
airport in Bogota.
Natural gas companies
Pirineo Gas and Grupo
Cobra were seeking an $800
million dual-tranche with
a three- to four-year tenor
to back services rendered
on two natural gas fields in
Mexico.
The Mexico City Airport
Group has been in talks
with banks for a $2 billion to
$3 billion loan to refinance
the beginning works on a
new airport in the capital
city. Abengoa Mexico was
also in talks with bank to
structure a mini-perm credit
to back its $663 million Norte
III combined cycle plant in
Ciudad Juarez. LF
July/August 2015 - L ATINFINA NCE.COM 5
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