Cruzeiro do Sul Launches Dollar Bond

Brazilian midcap bank Cruzeiro do Sul is hoping to price a new dollar bond in the next 2 weeks. The bank has issued a prospectus for a new 2-year note with indicative pricing at 9.75%. BCP Securities is sole lead arranger for the deal, which is targeting upwards of $50m in volume. The bank was downgraded in December to Ba2 by Moody’s, which has a negative outlook on the credit. A banker on the deal tells LatinFinance the offer will be shopped largely to private banks. “[Midcap banks] are being told that there is a lot of demand for Brazilian paper from private wealth managers,” says Moody’s bank analyst Ceres Lisboa. He notes that many Brazilian mid-market banks are eager to take advantage of any potential issuance window that may be opening. But it remains to be seen whether an institution like Cruzeiro will be able to price below 10% given its rating and still constrained funding options in the local and cross border markets. In July 2008, Cruzeiro pulled a bond discussed in the $100m size area with a 3-year tenor, also via BCP. In April 2008, it issued $110m in 7.38% of 2010 bonds.