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LatAm banks return to syndicated loan market 0

May 22, 2013

A growing list of LatAm banks are heading to the syndicated loan market to diversify funding sources, amid growing investor appetite for their paper.

Some $1.5 billion is now being negotiated, with Itau preparing the largest loan, at $750m.

Among syndicated loans currently in process are Banco Internacional del Peru (Interbank), which held a bank meeting Tuesday, Peruvian development bank Cofide, which met lenders in New York and Taipei starting last week.

Panama's Banco General is heard with commitments due at the end of the month. In Brazil, Banco Daycoval is working on an AB loan with participation from the IFC, and Itau is also moving toward a close, with commitments heard already due following bank meetings in New York, London and Taipei.

The institutions will use the funds to refinance and in other cases for general corporate purposes before they need to put the money to work.

The flurry of deals offers renewed hope for a market which had seen volumes plummet in the wake of the global financial crisis, and which has since struggled to return to pre-crisis levels. LatAm borrowers have by and large shunned loans in favor of bonds for medium term financing, in part because of favorable pricing.

Amid rising interest from Asian investors, issuers have started to do double launches in New York and then in Asia, say market sources. Smaller ticket sizes are becoming more common, in an effort to bring in those investors in Asia that will only take on $5m-$10m tickets, for example.

Banks are choosing to syndicate smaller deals in the marketplace, which they could do as club deals, in what many see as taking advantage of an opportunity to grow bank relationships via wider syndication. Corporate players, meanwhile, are favoring club deals over term loans at present, add market players.

In terms of diversity, Middle Eastern appetite in the space is growing, with banks such as National Bank of Abu Dhabi, which is heard on both Itau and Interbank, eager to put liquidity to work.

For more information about the syndicated loan market, see the LatinFinance Daily Brief.

Daycoval A-B Nears Close

Interbank Loan Details Emerge

Cofide Advances Loan

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