Sabesp Heads to Debenture Market

Companhia de Saneamento Basico do Estado de Sao Paulo (Sabesp) plans to raise BRL1bn ($483m) in Brazil’s domestic bond market, it says. The Sao Paulo water utility has the option of up to three tranches, with the final terms to be set during bookbuilding. A 2018 tranche would pay 100% of the DI, and amortize in three equal parts during the final three years. An inflation-linked 2020 tranche would pay 5.70%, and amortize in two equal parts during the final two years. An inflation-linked 2023 tranche would pay 6.15% and amortize in three equal parts during the final three years. A 15% greenshoe is also available. Proceeds would repay existing debt. Banco do Brasil and Bradesco are managing the sale. Sabesp is seperately in the process of raising BRL500m through a Rule 476 restricted format bond sale. The 2015 debentures would pay the DI+0.30% during the first six months and step up incrementally every six months to a final DI+0.70% rate. Banco do Brasil and Bradesco are also managing that sale, being done to repay debt.