(Recasts with co-guarantor role, adds quotes, background)
By Bruno Federowski
SAO PAULO, April 4 Brazil's state development
bank BNDES will assume a role in guaranteeing infrastructure
loans by allowing other lenders access to collateral from
borrowers, its chief executive said on Tuesday, in the bank's
latest move to boost private sector participation in such
Talks with public and private banks are at an advanced stage
and an announcement could come as soon as next week, BNDES CEO
Maria Silvia Bastos Marques told an investment conference
sponsored by Banco Bradesco BBI.
"We are trying to act in a way that is complementary to the
private sector," she said. "For instance, if the consortium of
private banks agrees to extend guarantees covering at least 40
percent of the project, we'll agree to cross-sharing."
She added that the state development bank and the World Bank
are discussing a mechanism to reinforce guarantees on local
notes issued to finance infrastructure projects.
BNDES is also studying the possibility of acting as a direct
guarantor, she said.
Since she took the helm of BNDES 10 months ago, Bastos has
sought to transform the state lender, which for years has
incurred sharp losses on cheap loans to handpicked local groups,
into a leaner, more efficient lender.
Last week, the development bank said it would introduce a
new benchmark lending rate pegged to yields on inflation-linked
bonds. That would replace a previous rate set on a quarterly
basis by Brazil's top economic policy body.
Bastos said the bank intends to eliminate the spread between
the new rate and so-called NTN-B bond yields after a five-year
transition, effectively making it equivalent to the government's
During 13 years of left-wing Workers Party administrations
that ended last year, BNDES handed out heavily subsidized credit
at a steep cost to taxpayers, backed by repeated capital
injections by Brazil's National Treasury.
Bastos said there was "no possibility" that the Treasury
Department would step in once again. BNDES is eyeing a potential
return to the market this year, she added.
(Reporting by Bruno Federowski; Editing by Daniel Flynn and