December 8, 2003
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, sa
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.