VLI Multimodal, the logistics arm of Brazilian mining company Vale, secured the backing of local development bank BNDES for a project to modernize a 7,800-km railway network, the Ferrovia Centro-Atlântica.
The lender said it subscribed to half of the BRL1 billion ($165 million) in debentures issued by VLI, according to a press release issued Monday. The transaction was coordinated by BNDES, BTG Pactual, and ABC Brasil.
VLI, which plans to invest BRL3.9 billion in the rail project, was launched by Vale in 2010. It later sold minority shareholdings to partners such as Canadian investment firm Brookfield and Japanese conglomerate Mitsui but retains a 30% controlling stake.
BNDES owns 8% of VLI through its the equity investment arm, according to the company’s website.
Brazilian insurance broker Wiz is also turning to the debentures market for funds. It plans to sell BRL300 million worth of notes at the DI interbank lending rate plus 1.95% in order to roll over debt, according to the minutes of a board meeting.