RioPrevidência, the public pension fund of Brazil's state of Rio de Janeiro, plans to sell at least $1 billion of 10-year senior secured bonds as early as Thursday, a source with direct knowledge of the deal told Reuters. RioPrevidência is offering as collateral for the bonds its rights to present and future oil and gas royalties and special participations, said the source, who refused to be indentified because the deal is in the works. The deal is expected to be rated "BBB minus" by Standard and Poor's and "BBB" by Fitch Ratings, the source said.
The pension fund is offering investors a yield in the mid-6 percent, or around 6.5 percent, the source added. The investment banking units of Banco do Brasil SA's BB Securities and France's BNP Paribas SA are managing the transaction.