Sabesp Eyes Local Bond Tap for Refi

Brazilian water utility Sabesp is preparing a debenture issue to replace the BRL650m in 180-day promissory notes it sold earlier this month. “This year we should return to the domestic market to roll over the promissory note we’ve done,” Mario Sampaio, Sabesp director of capital markets and investor relations, tells LatinFinance. The transaction should happen in the second half of 2009, he says, at the longest tenor possible, which today is roughly 3 years. He adds that the utility is also considering a sizeable debt offering at the end of the year or early 2010 to help fund refinancing needs it will have in 2010. Sampaio says Sabesp would consider both domestic and international bonds. “Our priority is the Brazilian market, which in our view is improving, to limit our FX exposure,” he says.