Brasil Foods plans sale of global bonds

Brasil Foods, Brazil's biggest pork and poultry producer, plans to sell 10-year global bonds to take advantage of the rising demand for emerging market corporate debt.

Sao Paulo-based Brasil Foods is considering the sale of at least US$500 million in dollar-denominated senior notes as early as next week, said a source, who could not be cited because the deal is in the works.

Brasil Foods is taking advantage of a window of opportunity for emerging market companies to borrow from global investors. Brasil Foods might be borrowing overseas as yields remain low and demand for debt continues strong among emerging market investors, analysts said.

Gains in the local currency over the past year, while making it cheaper for Brazilian companies to borrow abroad, has hampered export receipts for Brasil Foods in recent months.

"The financial reality is different from the operational reality, when you think about foreign exchange cash flows. Indeed, if they manage to lock-in some good yields, this could be beneficial for their financial position overall," said Renato Prado, a food analyst with Sao Paulo-based Banco Fator.

Brasil Foods has hired Banco Itau, Banco Santander and JPMorgan Chase handle the deal, said the source.

A group of executives led by Chief Financial Officer Leopoldo Saboya will meet with investors in London, Boston, New York and the US West Coast from January 18-20, the source added.

The company was formed last year after Perdigao took over Sadia. The takeover has been approved by European regulators but awaits approval in Brazil, where it faces regulatory scrutiny.