Finally, Eletrobras Mandates USD Bond

Brazil’s Eletrobras has named Credit Suisse to manage an upcoming dollar bond issue, Raquel Krauss head of Eletrobras’ Funding Division tells LatinFinance. The announcement had been anticipated since RFPs were due at the beginning of the month. Participating bankers said that the winner need not necessarily be a balance sheet champion, but rather the shop offering to deliver the lowest all-in cost. The government-controlled utility is heard planning a 10-year bond of up to $600m in size, though an issue is not expected soon. Krauss did not comment on timing or size of a bond. The BBB minus issuer’s existing 7.75% of 2015s traded recently at 103.00 to yield 7.17%, according to data from Credit Suisse. Bankers expect a premium of 50bp-100bp on a new bond, noting that the 2015 is an inefficient benchmark, since it is relatively illiquid. Eletrobras approved a BRL30bn investment plan for 2009-2012. Of the total, the company says it already has BRL3.9bn in financing from the BNDES and Brazilian banks, and can use BRL10.9bn from its own resources. So far this year Credit Suisse has had joint books on Digicel’s $335m 2014 with Citi and JPMorgan in March, and on Mexico’s $1.5bn 2014 with Deutsche Bank and HSBC in February. It ranks 10th in the regional DCM league table, according to Dealogic.