Votorantim unit clinches first Brazil bond offering since November

jueves 7 de mayo de 2015 14:17 GYT
 

By Guillermo Parra-Bernal

SAO PAULO May 7 (Reuters) - Votorantim Cimentos SA on Thursday became the first Brazilian company to tap international bond markets since November, after clinching the sale of 500 million euros ($560 million) in 10-year debt.

São Paulo-based Votorantim Cimentos sold the debt at a price of 98.542 cents on the euro to yield 3.737 percent. Investors, chiefly Europe-based pension funds and asset managers, placed bids 1.5 times the amount of debt offered, a source with knowledge of the deal told Reuters.

Proceeds from the deal will be used to repurchase a $303 million euro bond due in 2017, Chief Financial Officer Lorival Luz said in a phone interview from London. The sale came in the wake of a global bond market rout and growing concern over the impact of Brazil's sagging economy and political uncertainty in the wake of several corruption scandals.

Thursday's bond deal was the first by a Brazilian corporate borrower since state pension fund RioPrevidencia's November sale of $1.1 billion of oil royalty-backed debt. A graft scandal involving state-controlled oil producer Petróleo Brasileiro SA and the biggest local engineering firms blocked access to debt capital markets for Brazilian borrowers this year.

Yields across Europe, including Germany, had their largest weekly rise since mid-1999, after fears of deflation eased and investors began to balk at yields near zero.

Still, the deal priced in line with Votorantim Cimentos' guidance of 3.10 percentage points over the mid-swaps rate, a key corporate bond benchmark, Luz added.

So far, no Brazilian company has sought to tap the U.S. dollar bond market, which has proven wary of new issuers after Petrobras and other key issuers got involved in money-laundering and graft accusations.

"Our deal had a great reception from investors in this environment," Luz said, adding that executives discussed the deal with investors in London, Paris, Amsterdam, Munich and Frankfurt this week.

The company hired the investment banking units of Citigroup Inc, Deutsche Bank AG, HSBC Holdings Plc, Banco Votorantim SA, Banco do Brasil SA, Bank of America Corp, Mizuho Financial Group Inc and Banco Santander SA to advise on the deal.

Votorantim Cimentos is a unit of Votorantim Participações SA, the country's largest diversified industrial holding company. (Reporting by Guillermo Parra-Bernal; Editing by Chizu Nomiyama)