Telemar to Unveil Brazil Loan

Brazilian telecom Telemar is set to unveil the remaining portion of its M&A financing package for the acquisition of Brasil Telecom this week. CEO Luiz Eduardo Falco tells LatinFinance the 1-year bridge is being done in the local Brazilian bank market. In September, the company scrapped an attempt to raise $1.5bn in the cross border bond market. Bankers leading it said at the time that the company would fall back on Brazilian banks to complete the financing. Falco says Telemar’s M&A financing needs add up to BRL2.2bn, indicating the forthcoming facility’s potential size. Citi, Santander, Banco do Brasil, Bradesco and Itau were leads on the pulled bond deal, and some are likely to resurface on the new loabn. “It doesn’t matter if it is local or foreign, the term and cost [of the financing] are most important,” Falco says. In July, Telemar sold BRL3.6bn in one-year promissory notes and borrowed BRL4.3bn in the form of 2016 CCB credits from Banco do Brasil to help pay for the purchase. Falco explains getting get long-term funding in any market next year will be difficult, and declines to speculate on what options might be available when it seeks to refinance the bridge loan and the July promissory note issue.