The Inter-American Development Bank announced the approval today of an up to $68 million partial credit guarantee for a bond issue by the private Brazilian telecommunications company Telemar Norte Leste S.A. (“Telemar”). The total bond issue will be the equivalent of $170 million, denominated in local currency, while the BankBoston de Brasil will be the placement agent.
The guarantee is designed to strengthen local capital markets by creating new investment opportunities for institutional investors. The bonds will have a longer tenor than those presently available on the Brazilian market.
Telemar is to dedicate the new resources obtained by the issue for the expansion of its management systems and the modernization of its telecommunications network, enhancing the quality of the system, increasing productivity and achieving greater competitiveness in the areas of Internet and data services.
The project will reduce the amount of time to install new lines and will resolve issues of network congestion. It will offer users a new service with access to Asymmetric Digital Subscribers Lines (ADSL) and reduce the number of requests for repairs.
Telemar is a subsidiary of Tele Norte Leste Participações S.A. – one of the private companies formed after the restructuring and privatization of the state telecommunications company – which operates fixed lines in Northern Brazil, serving a region comprising 93 million inhabitants. The service area constitutes 64 percent of the country’s territory and 40 percent of its gross domestic product.
This announcement is only for information purposes and does not constitute an offer for a sale nor is it a solicitation for the purchase of securities.