São Paulo's water utility Sabesp to raise US$450mn from bond issue

The board of Brazil's biggest water utility Sabesp, which operates in São Paulo state, authorized the firm to raise up to 2.5 billion reais (US$452 million) from the issue of non-convertible debentures. 

The debentures mature in two years and the proceeds will be used in projects linked to sustainability, the company said in a statement.

The paper will be aimed at professional investors and will be entitled to remuneration of 100% of the accumulated variation of the interbank deposit rate (DI) rate, plus a spread of 0.30% per year.

The issuance is the company's first after the completion of its privatization.

The company, previously controlled by São Paulo state, was privatized in two phases, both in July, with the state reducing its stake in the firm from 50.3% to 18.3%.

The first stage of the process was concluded when local utility Equatorial Energia acquired a 15% stake for 6.9bn reais at a price of 67 reais per share.  

The second stage involved offering 17% of the shares on the stock market, with the government raising 7.9bn reais from investors.