Investors placed over $4.6 billion worth of bids for a potential bond offering by RioPrevidência, the public pension fund of Brazil’s state of Rio de Janeiro, which has plans to sell at least $1 billion of 10-year senior secured bonds on Thursday, a source with direct knowledge of the deal told Reuters. RioPrevidência and banks leading the transaction will unveil formal pricing guidance for the issue in coming hours, said the source, who declined to be identified because the deal is in the works.
RioPrevidência is offering as collateral for the fixed-rate bonds its rights to present and future oil and gas royalties and special participations, said the source. 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 sounded out investors on a preliminary basis, offering to pay yields in the mid-6 percent range, 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.