Latin Finance - January/February 2010 - 28

Steady Sailing antander has demonstrated in the past 14 months that it has what it takes to weather a downturn and remain an active lender. The universe of global bank market participants has collapsed from about 60 active institutions pre-crisis to fewer than 20 post-Lehman, according to broad estimates by loan market participants. In LatAm, that number has been closer to six or seven banks, with the most active being BBVA, BNP, Calyon, Citi, HSBC and Santander. Of this lot, the two Spanish institutions and Calyon appear to have maintained the most consistent level of activity on the corporate lending side, say participants away from those shops. Santander and Calyon have been especially busy in project and structured financing, stepping up activity as others receded. BBVA’s heavy Mexico involvement and Santander’s Brazil exposure have given both shops plenty of unwanted work in waivers, forced refinancings and outright restructurings, which in both cases has accounted for a notable part of their league table credit. The two have, however, in large part avoided the messier business of converting FX derivative losses by their clients into long-dated loans. Santander’s business has been the most regionally diversified and included a mix of syndicated and bilateral corporate facilities, project financings and restructurings. And on the new business side, Santander has demonstrated that its integrated platform – which now includes cross-border bonds – is a real draw to some of the region’s top investment grade names during periods of turbulence. In 2009 alone, Santander was lead arranger alongside other banks for several billion dollars worth of bilaterals to Pemex, ENAP, Petrobras, Codelco and Termonorte/Termogas. For the first three, the Spanish bank also led subsequent bond takeouts. And an ability to cover its clients with local market lending and structured S Loan House Santander finance has also helped Santander pitch a value-added proposition. “They know both the local and cross border markets very well,” says Helena Ramos Valente, head of finance at Odebrecht Oil & Gas. She notes Santander has also displayed strong familiarity with financing partners both in Brazil, such as the BNDES, as well as ECAs overseas like Norway’s Giek, KfW of Germany and Korea’s Kexim and KEIC. with the local [Brazilian] banks, but it has a major advantage over them, which is cheap dollar funding,” says Ramos. She notes that less expensive access to dollars gives it a leg up over major Brazilian lenders like Itaú and Bradesco. “They are also aggressive in fees and pricing,” she adds, referring to the Spanish bank. Santander Brasil’s October IPO, which raised 14 billion reais, will bolster that position. The largest dollar-denominated project financing to be closed during the period under consideration is a twin drillship financing for Odebrecht’s Norbe VIII and IX platforms, worth $1.3 billion. Santander Santander’s Americas Loan Team (L-R): Sergio Lew, Marcelo Castro, Javier Rovira, Bill Donovan By far the largest project financing in Brazil’s history was the 8.2 billion real Santo Antônio hydro dam financing where Santander and a handful of other Brazil-based banks extended 25-year funds. That deal was also spearheaded by Santander, which was chief financial advisor to sponsors Odebrecht and Furnas. The funds, which are being distributed by BNDES and wholly underwritten by the commercial banks, began to be disbursed in early 2009. “Santander acts like and competes was one of the three banks supporting the project from the outset in 2008. That deal was closed in October 2009, marking the first large and broadly distributed platform financing to be completed since mid-2008. Also in Brazil, an impressive list of deals for tollroads – including Rodoanel, Fernão Dias and Raposo Tavares – shows the bank’s consistency across the region in structured lending and infrastructurerelated projects, a sector that is seen growing at faster pace than others in coming years. LF 28 LatinFinance January/February 2010

Latin Finance - January/February 2010

Table of Contents for the Digital Edition of Latin Finance - January/February 2010