The International Finance Corporation (IFC), the private sector arm of the World Bank Group, will provide a partial credit guarantee of up to US$7.5mn to enhance a US$25mn securitised bond issue in Peru for Corporaci Drokasa in which Interbank Group is participating as structuring agent.
Drokasa Group (CDK) is mainly engaged in the manufacture, marketing and sales of pharmaceutical products as well as in the production and export of asparagus and table grapes.
IFC’s partial guarantee is part of a broader strategy to help develop domestic capital markets and to expand financing options available to local corporations in Peru and Latin America. In this case, IFC will support the first bond issued by a diversified corporation with exposure in three different sectors, such as pharmaceuticals, distribution and agribusiness.
This guarantee facility will provide investors with an alternative high-quality long-term asset to diversify their portfolios, and demonstrate to other local companies a viable means of raising financing.
Peru’s capital markets are currently characterised by concentrated portfolios of institutional investors due to lack of issuers with sufficiently high ratings. In addition, investors do not have the possibility to diversify their holdings with alternative sectors because of lower ratings and a perceived higher risk. Institutional investors basic rating requirements are local A or better. IFC’s credit enhancement along with a trust mechanism or will raise the credit rating of the bond issuance to AAA.
Hory Chlimper, Corporaci Drokasa’s president notes: “With this issue our companies will gain access to the capital market and a wider investor base as a new source of financing for their development plans. The proceeds will finance maintenance and other capital expenditures, which will ensure the continued high efficiency of operations and set the basis for future growth, and refinance CDK’s outstanding short-term and long-term debt.”
CDK has been a key player in the Peruvian pharmaceutical industry since 1952 and more recently – since 1995 – in the local agribusiness activity, where it has enhanced the Peruvian asparagus exports and promoted the development of table grapes as a new export crop. CDK’s farms are located in Ica, where employs an average of 2,850 people. Its distribution centres and a pharmaceutical manufacturing plant are in Lima, where provide work for more than 1,050 people.