SAO PAULO, March 10 (Reuters) - Cia Energética de Minas Gerais SA, Brazil's third largest electricity company, approved a plan by a subsidiary to sell up to 1.7 billion reais ($548 million) in promissory notes to repay debt and purchase electricity in power markets.
The company, which is known as Cemig, will sell the debt in a so-called restricted effort placement, according to a securities filing dated March 4 that was published on Tuesday. The unit that will issue the debt is known as Cemig D, the filing added.
Cemig D agreed to pay borrowing costs equivalent to 111.7 percent of the benchmark CDI interbank interest rate, or about 14.1 percent. The CDI is currently at 12.60 percent.
Public offerings with restricted efforts differ from standard debt offerings in that a company does not have to request registration of the plan with securities industry watchdog CVM, only qualified investors can participate, and the deals cannot be marketed through road shows or the media.
Cemig hired the investment-banking unit of Banco do Brasil SA to manage the transaction, the filing said. Banco Bradesco SA, Itaú Unibanco Holding SA, Caixa Econômica Federal and HSBC Holdings Plc will work on the deal as joint bookrunners. (Reporting by Guillermo Parra-Bernal; Editing by Grant McCool)