Paranapanema Advances Local Convert

Brazilian metal producer Paranapanema plans to place BRL950m in convertible debentures within the next six months. A BRL200m 2010 tranche is set to pay 6%, while a BRL750m 2019 tranche pays 9%. The bonds will be immediately convertible into shares at the holder’s discretion, according to a filing which does not detail a conversion premium. The offering is part of an asset restructuring required by a 2006 agreement with creditors. Under the agreement, Paranapanema has the choice to raise capital through debentures or do an IPO. Plans for an IPO were canceled in March. Itau is managing the debentures sale. Separately, mining company Vale reiterated last week that it is eyeing the purchase of two of Paranapanema’s three main assets.