Sabesp Readies Private Placement with BNDES

Sao Paulo water utility Sabesp is planning to place BRL826m in 11-year bonds privately with the BNDES and BNDESpar, according to a company finance official, following approval from the Brazilian state development bank. The amount is expected to be spread out over 3 transactions of approximately BRL275m each, the first of which could close by year-end, the official says. Each issuance would be divided into 2 tranches paying TJLP+1.92% and another paying IPCA+9.79%. Proceeds will fund Sabesp’s BRL1bn investment plan, including 5 projects to build and upgrade waste systems, and make water systems more efficient and less energy-intensive. Separately, Sabesp is in the process of completing a BRL600m 2014 bond in the public markets through Banco do Brasil. That A+ transaction is set to pay DI plus up to 3.5%.