Eletrobras Brings Long-Dated Financing

Brazilian power utility holding company Eletrobras will today launch syndication for a $450m B-loan, part of a $600m CAF A/B financing. Proceeds to the state-owned BBB minus credit are destined for capital expenditures. The 7-year B-loan carries a margin of Libor plus 150bp and amortizes in years 4-7. CAF, meanwhile, is lending Eletrobras $150m in 12-year funds — a significant tenor for a Brazilian borrower. The deal, joint led by Citi, BNP and SocGen, is being launched amid much fanfare despite the long tenor, and is heard already counting on MLA support from Natixis, ING, BBVA, Santander and Sumitomo, says a banker close to the process. “Going forward we will be doing a lot more lending in Brazil and Argentina,” a CAF official tells LatinFinance, referring recent commitments of $500m from each country to the development bank, to be disbursed over the next five years. Today’s deal marks the third time Eletrobras has tapped CAF for funds, the first loan having taken place in 2003, says the official. A second bank meeting in Sao Paulo is scheduled for Wednesday.