U.S. banks are back in the Latin American loan market now that new bailout and aid packages are stabilizing the region.
Last week the telecommunications firm Entel Chile said it had won a syndicated loan of $235 million from a 20-member bank group that includes J.P. Morgan & Co. and Bankers Trust.
The loan came only days after the Inter-American Development Bank made its two first loans as part of an emergency aid program for Latin America that could provide as much as $9 billion in financing. The development bank approved a $2.5 billion emergency loan to Argentina and a $350 million loan to Colombia under the program.
Bankers say economic aid and political reform have combined to keep the regional economy stable and lessen the effects of the global economic crisis.
Loans from the region remain a tough sell, said Toby O'Connor, vice president Latin American loan syndications for Morgan, but well-structured and well-priced deals are getting done.
Morgan alone expects to complete two more deals in the region by Friday, and between the two has secured commitments from more than 30 lenders to participate.
"To the extent government agencies have provided liquidity, it helps us in our corporate business," Mr. O'Connor said. "The Latin American market has been challenging throughout the year."
Though deals are getting done, they are expensive, Mr. O'Connor said. Short maturities are also the norm, because few investors want to take long-term risk.
The Entel credit is for three years. It is priced at the London interbank offered rate plus 3 percentage points for the first two and Libor plus 3.1875 points in the third.
Morgan was the lead arranger and administrative agent. The bank group also includes Dresdner Bank Luxembourg, Banca Comerciale Italiana, and San Paolo Imi.
Even the aid package is priced at highly leveraged levels. The loans under the emergency facility are generally of five-year maturities and at variable rates of 400 basis points over Libor.
