Benetton Unit Hires Banks for $408 Million Bond Sale in Brazil

(Bloomberg) — Autopista Regis Bittencourt SA, a Brazilian toll road operator ultimately controlled by Italy’s Benetton family, has mandated three banks to sell as much as 1.7 billion reais ($408 million) of bonds in the local market.

Banco BTG (LON:) Pactual SA, Banco Itau Unibanco Holding SA and Banco do Brasil SA have been selected by the Registro, Sao Paulo state-based company to handle a dual-tranche deal that will be offered before the end of October, according to people with knowledge of the matter, who asked not to be named as the plan isn’t public yet.

The company confirmed the hiring of the banks and the size of the deal in an email, but didn’t comment further on timing or other specifics. Itau and Banco do Brasil didn’t immediately respond to requests for comment while BTG declined to do so.

Regis Bittencourt, which owns a concession to operate 403 kilometers (250 miles) of a highway linking Sao Paulo with Curitiba until 2033, will look to sell a first tranche of 1 billion reais maturing in 2031 that will pay inflation (IPCA) plus margin and a second tranche of 700 million reais coming due in 2027 at the inter-banking rate per one day (CDI) plus a margin. Margins will be determined after a book building auction.

The company will use proceeds from the sale to refinance debt and for capital expenditures. Regis has 921 million reais in loans maturing in 2023 and 2024.

Record Nearly Secured

The banks have told Regis that the second tranche could price at around CDI plus 1.1%, two of the people said. Arteris SA, the holding company that controls the toll operator, did its homework in August after getting its ratings raised by S&P Global Ratings. Spain’s Abertis SA controls Arteris while financial services provider Brookfield Aylesbury SARL holds a minority stake.

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Regis’ offering would come as Brazil’s local bond market is booming. Investors have been shifting to corporate bonds as rates on government debt fall to new lows. The decrease in government borrowing costs has propelled 134 billion reais of notes issued by companies so far this year, according to data compiled by Bloomberg.

A robust pipeline of debt deals in the works will add to what’s already been sold this year, setting up the Brazilian corporate bond market to easily surpass 2018’s record of 135 billion reais. At least another 5.3 billion reais in bonds issued by toll-road operators will come to market before December, according to the people.

Among those deals, Rota das Bandeiras plans to sell as much as 2.4 billion reais in mid-November, led mostly by BTG, with XP Investimentos SA and Banco ABC Brazil SA handling a quarter of the deal, according to a filing made last week. Ecorodovias Concessoes e Servicos SA intends to issue 230 million reais of bonds next month, according to an Oct. 1 board meeting filing. Meanwhile, two units of CCR SA have mandated Banco Bradesco SA to offer 1.7 billion reais of notes, the people said. CCR and Bradesco declined to comment.

The Benetton family operates more than 3,400 kilometers of toll motorway in Brazil. It controls Atlantia SpA, which completed its acquisition of Abertis in October of last year. Atlantia manages 14,000 kilometers of toll roads in Europe, the Americas and India, according to its website.

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