UPDATE 1-Brazil, banks near agreement on loan to power companies

miércoles 18 de marzo de 2015 11:32 GYT
 

(Adds dates, terms throughout)

SAO PAULO, March 18 (Reuters) - The Brazilian government and some of the nation's largest private-sector banks are nearing an agreement on a 3.4 billion-real ($1 billion) loan to bolster the finances of power distributors, an official said on Wednesday.

As many as 13 commercial banks will participate, with Banco Bradesco SA, Banco Santander Brasil SA, Banco BTG Pactual SA and Banco Safra SA acting as lead arrangers and guarantors, said Luiz Eduardo Barata, president of electricity clearinghouse company CCEE.

Barata said the CCEE, which stands for Câmara de Comercialização de Energia Elétrica, will convene a board meeting on March 25 to decide on the transaction. Reuters reported this month that private-sector lenders are willing to extend the loan to bolster the finances of distributors as long as borrowing costs reflect higher risks and a longer maturity.

He declined to detail terms and conditions of the loan, which would be the third to distribution companies in a little more than a year.

Utilities piled up large debts after a government-mandated reduction in power rates, and they had to buy electricity in the spot market to maintain supplies. Brazil is facing one of its toughest energy crises ever.

Customers will repay the utilities as tariffs rise to adjust to more expensive power generation. The loan is intended to help the companies fund operations until the money from higher rates enter their coffers. (Reporting by Aluísio Alves; Writing by Guillermo Parra-Bernal; Editing by David Gregorio and Leslie Adler)