CSN is sounding out market participants to increase the size of its USD 1.2bn bridge loan, according to two credit analysts.

The Brazilian steelmaking conglomerate will be holding investor meetings with Morgan Stanley in New York this week to “upsize” the bridge loan, the first analyst said.

Morgan Stanley is the lead bank in the transaction, a syndicated senior secured facility backed by CSN’s cement business, which is currently for sale, as reported. Morgan Stanley is also advising CSN on the sale of its cement business.

The facility, signed last month, came at a cost of SOFR+ 6% interest, with a five-year maturity and the potential to increase the size to USD 1.4bn.

Morgan Stanley could also try to sell part of the existing loan to other investors, according to a source familiar with the matter.

Before closing the deal with CSN, Morgan Stanley had tried to bring other banks into the deal, which it did in the end. Initially, the deal was negotiated with Morgan Stanley, Citi, Deutsche Bank, BNP Paribas an HSBC. In the end, the syndicate was formed by these banks plus Credit Agricole, Banco XP,  Banco do Brasil and Bradesco, as reported.

CSN withdrew USD 150m from the USD 1.2bn secured loan and repaid USD 182.9m outstanding on its 7.625% 2026 bond.

The company is expected to use USD 200m-USD 300m of the loan proceeds to repurchase a portion of its USD 1.3bn 6.75% 2028 bond, the first analyst said.

“I was expecting something larger [to repay the bond], although they might do USD 300m via tender and buy back a bit more in the secondary market,” a third credit analyst said, referring to the potential 2028 bond repurchase.

CSN is not yet active in accessing the secondary market to repurchase its 2028 bond, but it may become more active in the future, the third analyst added.

A spokesperson at CSN did not respond to a request for comment. A spokesperson at Morgan Stanley declined to comment on the matter.

The proceeds from the potential sale of CSN’s cement unit will be used to repay the bridge loan, and the remaining amount is expected to again be used to pay off a portion of the 2028s, according to the three credit analysts.

CSN is expected to present a plan to address the 2028 bond after the cement business sale, “with a partial payoff at par combined with a potential reprofiling of the balance into one or more tranches to further alleviate the near-term refinancing risk,” the second analyst noted.

However, one of the concerns is that there could be little money left to pay off part of the 2028s after the bridge loan is repaid, according to the first credit analyst. “The company needs to sell the cement business for well above BRL 10bn (USD 2bn),” the same analyst said.

Cement producers in Latin America “can very well trade at 10x EBITDA; but being a tad more conservative and assuming an 8x multiple and an EBITDA of BRL 1.5bn, you get to an enterprise value of around BRL 12bn,” the third analyst said.

It is unknown how much cash CSN Cimentos has, but considering its BRL 3bn in gross debt as of 3Q25 and assuming it has zero cash, the final value CSN could obtain from the sale of its cement business would be around BRL 9bn, according to the third analyst.

At least 12 parties have signed NDAs in connection with the sale process for CSN’s cement subsidiary, and the company is expecting up to 10 non-binding offers by the 1 May scheduled deadline, although the timeframe may be extended by a week or two, according to the second analyst.

CSN’s USD 1.3bn 6.750% 2028 bond traded at 82.97 today, according to MarketAxess. Its USD 850m 4.625% 2031 bond traded at 66.533 today.