CORPORATE HIGH-YIELD BOND: Cosan $500m/BRL500m dual tranche bond

Jan 17, 2014

The Brazilian energy and infrastructure firm reopened the global-real market, and says local currency funding is set to become even more important this year

When Cosan looked at the bond market to take out a pricey acquisition financing in early 2013, it wanted to raise the money in local currency. But investors were wary of fluctuations in the Brazilian real’s price against the dollar.

So the borrower started cautiously, with lead managers Bradesco, BTG Pactual, Itaú and Morgan Stanley only announcing a 10-year non-call five dollar-denominated deal. When demand started overwhelming the $500 million deal, they added a five-year global 500 million real ($212 million) tranche.

In the end, investors placed orders of around $9 billion equivalent for the dual-tranche deal. Enthusiasm for the bond stayed strong afterwards, too,...

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