By Reshmi Basu
New York, July 13 - Brazilian utility company Energisa SA sold $250 million of seven-year bonds (/B+/BB-) at 99.792 to yield 10¾%, or 566 basis points over Treasuries, according to a market source.
The deal priced at the tight end of price guidance, which was set at 10¾% to 11%.
Energipe SA and Saelpa SA issued the bonds while holding company Energisa guaranteed the offering. Energipe sold $162.5 million of the new bonds while Saelpa issued the remaining $87.5 million, according to a news release.
Proceeds will be used to repay short-term debt.
Merrill Lynch was the lead manager for the Rule 144A and Regulation S transaction.
On May 11, Prospect News reported that Energisa had planned to sell up to $250 in perpetual bonds. But as interest rate fears eroded the market's appetite for risk, the company changed the tenor to 10 years but saw no demand.
Then at the end of June, the maturity was once again changed to seven years.
| Issuer: | Energipe SA and Saelpa SA
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| Guarantor: | Energisa SA
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| Amount: | $250 million
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| Maturity: | July 19, 2013
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| Issue: | Bonds
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| Coupon: | 10½%
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| Issue price: | 98.792
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| Yield: | 10¾%
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| Spread: | 566 basis points more than Treasuries
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| Lead manager: | Merrill Lynch
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| Pricing date: | July 12
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| Settlement date: | July 19
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| Ratings: | Standard & Poor's: B+
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| Fitch: BB-
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| Price guidance: | 10¾% to 11%
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| Distribution: | Rule 144A and Regulation S
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