SAO PAULO, Feb 21 (Reuters) - Banco Daycoval SA, a Brazilian bank specializing in loans to small- and mid-sized companies, plans to raise funds in the U.S. dollar-denominated bond market within weeks, a source with direct knowledge of the situation said on Friday.
The São Paulo-based bank is considering the sale of $150 million to $200 million worth of senior notes with maturities between three years and five years, said the source, who declined to be identified since the deal is in the works.
The bank plans a series of investor meetings outside Brazil as early as next month, the source said. An official at the bank declined to comment. Daycoval last sold dollar-denominated debt abroad in January 2011.
Some investors have noted a dearth of Brazilian mid-sized bank debt paper, as declining profitability and a bout of bankruptcies in the wake of accounting irregularities reduced the allure of the asset class. Banks in the segment had sold billions of dollars in issues to yield-thirsty emerging market bond investors between 2006 and 2011.
The latest sale of global bonds by a Brazilian mid-sized lender took place in April, when Banco Fibra SA raised $150 million in an offering of debt due in 2016. Borrowers are preparing for the opening of a window of opportunity for transactions after Brazil's Carnival holiday in March and through April, the source added.
Currently, Daycoval's dollar bonds outstanding total $600 million. One series matures in March 2015 and the other in January 2016.
Among Brazilian companies that could tap debt markets in Brazil and overseas are Vale SA, the world's largest iron ore producer, with a sale of 10-year dollar bonds, as well as state-controlled oil company Petróleo Brasileiro SA with the offering of local notes known as infrastructure debentures as well as the placement of dollar-, euro- and British pound-denominated bonds before the end of this year. (Editing by W Simon)