Second Tier Success
Dec 8, 2003
Brazil’s Banco Bradesco locked in its lowest rate ever
in a subordinated debt issue. More banks are lining up to follow
Bradesco into a market hungry for Brazilian risk.
In November, Banco Bradesco, Brazils largest private sector
bank, placed the largest subordinated debt issue ever sold by an
emerging market issuer. Merrill Lynch lead-managed the $500
million, 10-year issue that had a 8.75% coupon. The issue, which
carried political risk insurance from Sovereign Risk Insurance, was
Bradescos cheapest tier-two capital deal yet.
The deal was a hit with investors. It clocked up $800 million in
orders before Merrill Lynch closed the book. The bond, launched at
a spread of 449.7 basis points over US Treasurys and priced at
99.183%, was soon trading at 102.627%. José Guilherme Lembi de
Faria, executive director at Bradesco, says the bank is raising
subordinated debt, which is treated as tier-two capital, in
preparation for an expected surge in lending next year. The
Brazilian economy is picking up...
Already have an account?
Subscribe now for unlimited access to all current and archive news, data and market analysis.
Take a free two-week trial now for the latest news, data and market analysis.