Cosan Overseas Limited, a subsidiary Cosan Limited (CZZ), announced the reopening of its Senior Notes perpetual offering issued on October 29th, 2010.
The issue of $200 million worth of notes is priced at 103% of the face value, with an effective interest rate of 7.429% per annum.
The notes are guaranteed by Cosan S.A. Indústria e Comércio and Cosan Combustíveis e Lubrificantes S.A. (CCL).
The proceeds from the issue will be utilized for general corporate purposes, including strengthening of working capital.
Management also stated the ratings provided by three leading rating agencies.
Standard and Poor’s rendered a BB rating to the issue, with a stable outlook. Furthermore, Moody’s is considering its rating of Ba2 for upgrade.
Fitch Ratings rendered a BB rating, denoting that Cosan’s debt is speculative and is prone to elevated default risk. The rating was based on the company’s impressive business and financial profiles after the partnership with Shell International Petroleum Company Limited. Furthermore, the rating agency has a stable outlook for the company. However, the company is still behind the investment grade domain, starting from BBB.
Earlier in May 2011, Cosan completed the repurchase of its entire 8.25% Perpetual Notes worth $450 million. The company refinanced the notes with a syndicated bank loan of the same amount, which will bring down its annual interest expense by $25 million.
Cosan, the largest sugar and ethanol producer in Brazil, ranks third in sugar and fifth in ethanol production in the world.
We have a long-term Neutral recommendation on the stock, supported by a short-term Zacks #3 Rank (Hold).
Be the first to comment