By Brazil Stock Guide – Companhia de Saneamento Básico do Estado de São Paulo (Sabesp) (B3: SBSP3 | NYSE: SBS) has structured a $1.5 billion international financing by combining a long-term loan from the Inter-American Investment Corporation, the private-sector arm of the Inter-American Development Bank, with the issuance of blue bonds linked to water and sewage projects. The deal expands the company’s access to long-dated capital as it moves to accelerate sanitation coverage in Brazil’s largest state.
The package is split into two loans. The first totals $150 million, will be disbursed in a single tranche and matures in 2038. The second, amounting to $1.35 billion, will be released in two tranches and underpins an international bond offering with maturities in 2031 and 2036. A Luxembourg-based financing vehicle connects the loan to the bond issuance.
“The proceeds will be allocated to projects tied to meeting sanitation universalization targets,” the company said in a statement to investors.
Two-layer financing
The blue bonds were priced in two series. The first totals $850 million, matures in 2031 and carries a 5.75% coupon. The second amounts to $500 million, matures in 2036 and was priced at 6.5%. The notes will be listed on the Euro MTF market of the Luxembourg Stock Exchange and sold exclusively to institutional investors. There is no public offering in Brazil.
Why it matters
The financing comes as Sabesp steps up the largest investment cycle in its history. After privatization, the company committed to bringing forward universal access to sanitation to 2029, five years ahead of Brazil’s legal deadline, supported by an investment program estimated at around R$70 billion ($14 billion).
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