SAO PAULO, March 21 (Reuters) - Banco do Brasil SA borrowed $1 billion from a pool of 22 banks in a syndicated loan transaction, its first ever, allowing Latin America’s largest lender by assets to forge stronger ties with banks operating across Asia.
Banco do Brasil borrowed $700 million in a three-year loan, paying an annual interest rate of 1.35 percentage point above the six-month London interbank offered rate, José Maurício Pereira Coelho, the bank’s head of finance, said on Friday. The remaining $300 million, four-year portion of the loan will pay 1.50 points more than six-month Libor, he added.
Borrowing costs were in line with what a source had told Reuters was the initial guidance issued in December.
Spreads, or the difference between loan rates and Libor, came in tighter than rival Itaú Unibanco Holding SA’s $1.5 billion loan in July, which paid 1.4 point above Libor for a three-year credit line, and Libor plus 1.55 points for a four-year portion.
The deal marks Brasilia-based bank Banco do Brasil’s debut in a market that is becoming an alternative for Brazilian borrowers as bond deals are taking longer to happen. Cement producer InterCement Brasil SA and construction giant OAS SA recently launched similar deals, while Raízen Energia SA, an ethanol and fuel distribution venture between Cosan SA and Royal Dutch Shell Plc, is also considering seeking loans.
“We were looking for geographical and funding source diversification,” Coelho said by phone. “The structure was successful, it allowed us to pulverize the number of lead arrangers in the syndicated loan.”
The loan was arranged by BNP Paribas SA, Citigroup Inc, HSBC Holdings Plc, JPMorgan Chase & Co and Standard Chartered Bank Plc - all them banks with strong presence in the Asian market, he said.
Coelho declined to say whether Banco do Brasil is considering a similar transaction in coming months. (Reporting by Guillermo Parra-Bernal; Editing by Leslie Adler)