UPDATE 2-Brazil's Usiminas draws bank refinancing deal respite; shares jump

miércoles 15 de junio de 2016 12:35 GYT

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By Guillermo Parra-Bernal and Alberto Alerigi Jr

SAO PAULO, June 15 (Reuters) - Usinas Siderúrgicas de Minas Gerais SA agreed with banks and local bondholders to refinance about 5.4 billion reais ($1.6 billion) in loans and local notes, boosting efforts by Brazil's largest listed flat steelmaker to overcome a deep crisis.

In a Wednesday securities filing, Belo Horizonte-based Usiminas said banks agreed to extend maturities over the next 10 years with a three-year grace period on the principal. A spokesman for the company declined to detail additional terms of the new arrangement, saying the accord is under banking secrecy.

Creditors including Banco do Brasil SA, Banco Bradesco SA, Itaú Unibanco Holding SA and state development bank BNDES signed binding refinancing accords as part of the deal. The refinancing, equivalent to 75 percent of the company's debt, hinges on full approval of a recent capital injection of 1 billion reais, the filing added.

Reuters had reported in February that banks and Usiminas were discussing terms of a refinancing of about 4 billion reais in loans. The lender had obtained a 120-day standstill accord with creditors on March 22.

Nonvoting shares surged 14 percent to 1.91 reais on Wednesday, their biggest intraday gain since Aug. 4, on optimism the refinancing will buy the company time to return to profitability in Brazil's harshest recession in eight decades. The stock is up 24 percent this year.

"The probability of financial distress is now materially reduced after the recent developments at Usiminas," said Leonardo Correa, an analyst with Banco BTG Pactual.