Snapshot: The latest debenture issues by Brazilian carriers

Brazil’s carriers and internet service providers (ISPs) continue to turn to local bonds known as debentures to refinance debts, increase working capital and fund investments.

In less than a month, three leading fiber broadband providers have issued debentures worth close to 1.8 billion reais (US$330 million).

The latest was Giga Mais Fibra, which belongs to ISP group Alloha, by approving the issue of 550mn reais in incentivized debentures.

Incentivized debentures seek to encourage private sector participation in long-term financing of telecom infrastructure. The instrument was approved for use by telcos back in 2020.

Giga's debentures will be sold in three tranches, adding to other types of funding recently lined up by the company.

Days earlier, Brazilian development bank BNDES had approved a 148mn-real credit line for Giga, which will be channeled via the Fust telecoms service universalization fund.

The 12-year line will be used to expand broadband connectivity in municipalities in Maranhão and Pará states.

BRISANET

Trailing Alloha as the country’s second biggest ISP, Brisanet also announced its second issue of debentures this week.

The Ceará-based carrier raised 600mn reais from the sale of common debentures with a six-year maturity, saying investor demand surpassed 1.1bn reais.

Ratings agency S&P assigned an investment grade rating of ‘brAA-‘ with a stable outlook to the debentures.

The operation had Banco Santander as lead bookrunner, and Bradesco BBI, Itaú BBA and UBS BB as joint bookrunners.

Brisanet ended June with 1.36mn customers in all nine states of the northeast region, with 7mn homes passed in 158 cities, according to a separate report. During the month, the company added 15,200 clients.

DESKTOP

At the end of June, São Paulo-based Desktop completed its sixth issuance of common debentures, worth 625mn reais.

Proceeds from the six-year securities will be used for working capital, bolstering the company’s capital position and refinancing previous debenture issues.

A record high of 236bn reais was raised from common and incentivized debentures last year, according to local financial market entities association Anbima.