Washington D.C., September 10, 2002—
The International Finance Corporation (IFC), the private sector financing arm of the World Bank Group, Citigroup and J.P. Morgan Securities Inc. have arranged and syndicated US$218 million in senior secured facilities to support the modernization and expansion of Bogota-based Bavaria S.A, the largest beverage manufacturer and distributor in Colombia, Ecuador and Panama, and the fourth largest brewer in Latin America.
The original financing, which was structured as a $200 million five-year facility, was oversubscribed in the market by $18 million. The $218 million syndication is part of a larger financing package of US$318 million that includes a ten-year, $70 million IFC A Loan and a ten-year, $30 million IFC C Loan, both of which are for the account of IFC and closed in June.
“We are extremely proud of the results of this syndication and pleased to have partnered with the IFC, Citigroup and JP Morgan,” said Ricardo Obregon, President of Bavaria. “We believe this financing signals the beginning of a long and fruitful business relationship, as Bavaria embarks on an ambitious expansion plan to consolidate its market position in the region.”
IFC, Citigroup and JP Morgan arranged three separate parallel loans for Bavaria: (i) a five-year, $145 million IFC B loan for the account of commercial banks, (ii) a five-year, $48 million D Loan for commercial banks not under the IFC umbrella and (iii) a five-year, $25 million EDC Loan for a total financing package of $218 million.
ABN AMRO BANK N.V., Citigroup and JP Morgan joined the IFC B Loan as Arrangers; BankBoston N.A. and HVB Group as Co-Arrangers; Banco Bilbao Vizcaya Argentaria S.A and Banco Español de Crédito as Lead Managers; and Natexis Banque Populaires joined as Manager.
Bancolombia (Panama) S.A. joined the parallel D Loan as Arranger; Banco Corfinsura Internacional Inc. and Primer Banco del Istmo, S.A. as Co-Arrangers; and Banco Colpatria Cayman Inc. and Banco de Bogotá S.A.–Panama joined as lead Managers. Export Development Canada (EDC) joined the parallel EDC Loan as Arranger. The D Loan and the EDC Loan rank pari passu with the IFC A, B and C Loan facilities.
Pricing for IFC’s A Loan is 350 basis points above LIBOR, while the B, D and EDC Loan facilities are priced as follows:
|
Period
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Spread over LIBOR
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Signing until July 14, 2003
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275 basis points
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July 15, 2003 until July 14, 2004
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300 basis points
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July 15, 2004 until July 14, 2005
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325 basis points
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“Bavaria is a market leader and a world-class company,” said Mario Espinosa of Citigroup. “This enabled Bavaria to attract capital from a large number of geographically diverse banks.”
“This syndication is a strong vote of confidence in Bavaria and the value of the IFC umbrella in mobilizing during difficult market conditions,” added Suellen Lazarus, Director of IFC’s Syndications and International Securities Department. “Bavaria’s market leadership and blue-chip reputation allowed the lead arrangers to tap not only the international bank market, but also to raise additional long-term funds from other local and multilateral financial institutions.”
“Bavaria successfully closed the largest syndicated loan in the Andean region since January 2001 amidst difficult market conditions, mainly as a result of the Company’s status as a prime corporate name in Colombia and a growing regional player in the beverage sector,” said Lisandro Miguens of JP Morgan.
The financing will assist Bavaria with its ongoing modernization and expansion program and positions the company to access domestic and international capital markets on a sustained basis. With the support of IFC, Bavaria has also agreed to develop a comprehensive new corporate governance code incorporating international best practices, which will establish an important benchmark in Colombia and Latin America.
Bavaria S.A. is the largest beverage company in Colombia and the fourth largest brewer in Latin America. Its Aguila, Costeña and Club Colombia brands are leaders in Colombia. In Ecuador, Bavaria is the market leader with the Pilsener, Club, and Dorada brews. It is also number one in Panama with the Atlas and Balboa brands. Bavaria also sells fruit beverages and mineral water. In addition to its core business, the company actively promotes community and social programs. The company is listed on the Mercado de Valores de Colombia under the symbol BAVAR CB.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
Since its founding in 1956, IFC has committed more than $31 billion of its own funds and arranged $20 billion in syndications for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3 billion.
