Loan signings gather pace in busy August
Recent loan syndication closings have boosted activity in a market where volume has been down from last year
Borrowers have rushed to the loan markets with a streak of
deals signing this month, as bankers expect a darkening outlook for bond markets
to push loan volumes higher.
of a revolving credit facility to $535 million from a planned $300 million
caps off a busy June-August period in the syndicated loan market, with issuers getting
deals done ahead of the uncertainty surrounding credit markets for the
remainder of the year. The four-year trade facility counted nine lenders.
This week, Mexico’s CFE is close to finalizing a
$1.25 billion revolver, and Brazil’s CHS has nearly completed a
$250 million trade facility. The loan market continues to be an option for
certain blue-chip corporates to raise funds, with Braskem and CFE following a
$2 billion five-year revolver for Brazil’s Vale last month. A string of banks
including Interbank, Daycoval and BTG Pactual also closed loans last month.
Smaller issuers are also finding access, with Colombian
packaging company Grupo Phoenix offering a $190
million facility. Guatemalan sugar producer and exporter Ingenio Magdalena
has launched a $100
million pre-export finance facility.
A rise in US Treasury rates is likely to make bond financing
more expensive than it has been this year, and currency moves – such as the
Brazilian real sliding past 2.40 Monday – threaten the attractiveness of local
currency financing. Both trends could keep the door open for the loan market.
The recent deals are notable for participation from European lenders. Bankers
say that if this becomes a trend it would also help more syndications get done.
In LatAm through Monday, borrowers have closed
on $23.89 billion in loan transactions this year, according to Dealogic data.
This is down from $28.48 billion in the corresponding period in 2012. LF