Bradespar Locks in Tight Debenture Spread

Bradespar has completed a sale of BRL800m in domestic bonds, achieving a lower than expected price amid continued contraction in Brazilian local market spreads. The equity arm of Bradesco sold BRL140m in 2010 bonds at 105% of DI and BRL660m in 2011s at 108% of DI. The issuer had been prepared to pay up to 125% of DI, and had earlier expected rates of 112% and 115%. Bradespar was the first Brazilian local issuer this year, paying 125% of DI for BRL610m in 36-month bonds and 110% of DI for BRL690m in 180-day CP. However, increased investor appetite does not seem to have translated so far into longer tenors. Fellow recent issuers Elektro and Tractebel were able to place 2011s, with only Ultrapar going longer than 2 years, getting a 2012 via private placement. Upcoming issuers Coelce and CCR will each shoot for 2014s. Bradesco managed the Bradespar bond, rated AA+ on a national scale. Proceeds will refinance existing debt.