UPDATE:Brazil's BES Investimento Announces Overseas Bond Offer
14 May 2009 - 2:13AM
Dow Jones News
BES Investimento do Brasil SA on Wednesday announced its first
overseas bond offer ever.
The bonds will mature in May 2012 and come with an indicative
yield of between 5.5% and 6% a year.
A source close to the deal told Dow Jones Newswires that the
company plans to raise some $100 million from the issue.
The offer comes only a week after Brazil's government reopened
its 2019 global bond, placing $750 million at a 5.8% yield. The
yield reflected declining spreads for Brazilian debt, which reached
252 basis points over U.S. Treasurys in the case of last week's
bond reopening. A bond offer by Brazil in January came with a
spread of 370 basis points over Treasurys.
According to analysts, last week's sovereign bond placement will
help open the door to more corporate issues. So far this year only
three Brazilian companies have issued overseas bonds. They are
state energy company Petroleo Brasileiro S/A (PBR), building
contractor Odebrecht and telephone company Tele Norte Leste
Participacoes S/A (TNE).
BES, the local Brazilian unit of Portuguese bank Banco Espirito
Santo S/A (BES.LB), is expecting to price the bonds later this
week.
"We saw an opportunity for this and I believe that it will have
strong demand, reaching $200 million," said the source.
BES is planning to use the money raised from the operation to
support its activities in Brazil.
The overseas bond issue is the first tranche of a planned BES
short-term note program of up to $300 million.
BES is headquartered in Sao Paulo and ended 2008 with total
assets of approximately 3.3 billion Brazilian reals ($1.6
billion).
-By Rogerio Jelmayer, Dow Jones Newswires; 5511-2847-4521;
rogerio.jelmayer@dowjones.com