Brazilian mining company Samarco Mineracao, which pioneered Brazil's securitization efforts with a $67 million deal launched in 1995, is getting ready to launch a second transaction.
Samarco will seek to swap its outstanding $40 million in seven-year asset-backed bonds issued in 1995 with new $100 million five-year paper through BNP Paribas and Banco BBA Creditanstalt. Pricing is said to be in the 350 basis points area.
"Securitization worked very well for us in the past," said Walter Taveira, chief financial officer at Samarco. "So when we were looking to refinance our existing debt, we decided to do an asset-backed deal again."
In contrast with the 1995 issue, which carries very strict covenants, the company is seeking to make the new offering more flexible. This will be reflected in the coupons: while the outstanding issue was priced to yield 10%, the new one is seen coming out at 10.5% to make up for the more flexible covenants.
About $40 million of the new issue will be aimed at bondholders willing to swap the original paper, with the rest offered to new investors.