Struggling hydro-power producer Companhia Energetic de Sao Paulo (CESP) is pressing ahead with plans to issue a receivables investment fund (FIDC) in Brazil's domestic market, sources said. In a release, the company said it was seeking up to R$315 million (US$101 million) in a five-year transaction backed by receivables stemming from contracts with Companhia Brasileira de Aluminio, Codemin, Carbocloro, Gerdau, and other companies that freely negotiate purchases from CESP. The issuer has selected three banks to manage the transaction: Banco Bradesco, Itau BBA, and Banco ABC Brasil. Each has agreed to underwrite or sell up to R$100 million (US$32 million) of the FIDC - depending on its final size - at a cost to the company of 200 basis points. This will come on top of fees for placement, structuring, coordination and other facets of the issue.

The fund will feature a senior/subordinated split. The issuer has set a ceiling for the targeted yield at 350 basis points over the benchmark CDI.

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