Tele Norte Lest (NYSE:TNE)
Historical Stock Chart

From Jun 2019 to Jun 2024

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