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06.30.09
» BNDES completes foreign fund-raising of US$ 1 billion
The BNDES, the Brazilian Development Bank, raised US$ 1 billion in foreign bonds, with a maturity of 10 years (2019). The operation was announced and priced on a single day and investors were paid a 6.546% interest, representing a 3% premium on the US Treasury bond. The funds will comprise the BNDES’ budget.
It is an excellent rate compared to the other emerging issuers in the foreign market. The premium paid on the BNDES’ bonds traded in the secondary market and issued last year, to mature in 2018, was 0.20%, below the 0.50% average, common in primary issuances in the foreign market. The operation was coordinated by the banks Goldman Sachs and HSBC and intermediated by Banco do Brasil and Banco Itaú.
Teams of directors from the BNDES ran an institutional road show on June 1 and 2 in New York, London, Los Angeles and Boston. A warm welcome combined with a promising market encouraged the BNDES to announce and price the operation on June 3. The demand was much higher than the US$ 1 billion offered to the market, and a considerable portion of bonds was acquired by long-term investors, which shows confidence in the credit risk of the BNDES’ bonds.
This successful issue consolidates the Bank’s presence in the foreign market, to which the Bank returned in 2008, after a seven-year absence. From 2002 to 2007, the Bank decided not to access the foreign capitals market due to its comfortable liquidity position and the high interest rates charged in operations.
In the 90s, some 22 issuances were made, amounting to US$ 6.4 billion. In 2008, the BNDES returned to the foreign market with the successful refinancing of foreign debt securities issued in 1998. The issuance amounted to US$ 1 billion, at face value, with interest coupon of 6.39% per annum. The operation was elected the best transaction in 2008 by the magazine Latin Finance in the categories quasi-sovereign, bond/financial and institution bond.
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