Companhia de Saneamento Basico do Estado de São Paulo’s (Sabesp) is targeting BRL 18bn (USD 3.4bn) in new debt this year, CFO Daniel Szlak told this news service. Last week’s USD 1.35bn bond transaction was the first piece of this effort.

The São Paulo state water utility added a USD 150m A loan from IDB Invest to a USD 1.35bn B loan arranged by the IDB and placed as 2031 and 2036 blue notes with international investors, as reported. This structure simplified the process, Szlak said. It allowed Sabesp to avoid issuing the bond from its subsidiary in Luxembourg, and thereby avoid the holding tax, as the IDB is exempt from such taxes in many countries, including Brazil. Also, creditors benefit from having the same priority as the IDB in the event of a default, the CFO explained.