MADRID May 1 Telefonica Brazil is
looking to issue 1.3 billion reals ($650 million) of five-year
debt in the local market, IFR Markets, a Thomson Reuters news
and market analysis service, reported on Wednesday.
The telecoms company will place a ceiling rate of DI+65
basis points and Itau will be the sole bookrunner,
"This is a very tight spread, even tighter than Cemig.
Telefonica rarely comes to market and is rated AAA locally so
they're able to do that," IFR quoted a local debt capital
markets banker as saying.
A spokesman for Telefonica in Madrid declined to comment.
Equity bankers said parent company Telefonica was
heard to be eyeing a sale of an up to 19 percent stake in its
Colombian arm, with Bank of America Merrill Lynch as one
of the possible lead bookrunners, according to IFR.
Telefonica, which has said it will reduce debt to under 47
billion euros ($62 billion) by year-end, compared to 51.3
billion euros at the end of 2012, announced on Tuesday it had
sold 40 percent of its Central American assets for $500 million
to help cut leverage.
The company, which is rated two notches above junk by two of
the three main credit rating agencies, must shrink its debt to
protect its prized investment grade status and prevent spiraling
debt financing costs that would be the result of a downgrade.