June 25, 2020 / 9:46 PM / 20 days ago

Credit Suisse, BNP may join Brazil's COVID-19 bailout of electric sector -sources

SAO PAULO, June 25 (Reuters) - Credit Suisse, BNP Paribas and Sumitomo Mitsui Banking Corp may join a bank syndicate that will provide 16.1 billion real ($3.01 billion) in loans to Brazilian power distributors hurt by the coronavirus pandemic, three people familiar with the matter told Reuters.

Banco Safra SA, Banco BV, BTG Pactual and Banco Alfa SA are also in talks with state development bank BNDES, which is leading efforts to assemble the emergency loans, the sources said on condition of anonymity.

Itaú Unibanco SA, Banco Bradesco SA, Santander Brasil SA and Banco do Brasil have already joined the syndicate, the sources said.

BTG Pactual and Bradesco declined to comment. The other banks did not immediately respond to requests for comment.

More than 10 unidentified banks are in talks to take part in the so-called “COVID account,” BNDES President Gustavo Montezano said on Wednesday.

Costs for the five-year loans will be passed on to consumers through electric bills, according to energy sector regulator Aneel, noting that the interest rate has yet to be determined.

The loans are set to benefit companies including those controlled by Italy’s Enel Spa, Spain’s Iberdrola , Portugal’s EDP and China’s State Grid, in addition to major local utilities such as Cemig, Equatorial Energia SA and Energisa SA.

Caixa Econômica Federal withdrew from the transaction, someone involved in the bank talks said.

“BNDES, BB, Santander, Itau and Bradesco are the cornerstone of the operation. They are likely to get the biggest tickets,” the source said.

Those five banks have more incentives to participate because of their significant exposure to the Brazilian power sector.

Details about the bailout, including costs, are expected to be public next week, Montezano said on Wednesday.

$1 = 5.3410 reais Reporting by Luciano Costa; Editing by Richard Chang

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