Brazil's Banco Itau issues $125 mln in Eurobonds

www.forbes.com Reuters, 01.10.03, 1:40 PM ET

SAO PAULO, Brazil, Jan 10 (Reuters) - Brazil's second largest private bank, Banco Itau <ITAU4.SA> (nyse: ITU - news - people), said it sold $125 million in 11-month Eurobonds on Friday, more than twice the initial amount offered.

The bonds were sold at a coupon of 6.25 percent, offering a yield of 6.375 percent, the bank said in a statement. The sale was conducted by Itau's agency in Grand Cayman.

Itau added it will use the funds, which are expected to be received on Jan. 17, as export financing and to beef up its cash flow at the Grand Cayman unit.

With the sale, Itau becomes the latest in a wave of Brazilian banks to capitalize on rebounding investor confidence in Latin America's largest economy since President Luiz Inacio Lula da Silva took office on New Year's Day.

Earlier Friday, one of Itau's main competitors, Unibanco <UBBR4.SA>(nyse: UBB - news - people), sold a $100-million one-year bond, while Banco Safra issued a $150-million six-month bond, raising $50 million more than initially expected.

In all, six Brazilian banks have now sold bonds in international markets so far this year, totaling $875 million.

International capital markets largely shut their doors to Brazilian companies in the middle of last year amid worries the the left-leaning Lula would win presidential elections in October and bungle the economy.

But since winning the election, Lula has repeatedly pledged to stick to austere fiscal policies, winning the former union boss applause from investors who once doubted his commitment to sound economics.