Commodity firm banks on ties with Shell

Sao Paulo

RAIZEN Energia SA's first-ever asset-backed bond sale shows how the sugar and ethanol producer is capitalising on its implicit debt guarantee from its owners to sway individuals into financing an industry in distress.

The company, a venture between Royal Dutch Shell plc and Cosan SA, sold 675 million reais (S$346.7 million) of five and seven-year notes backed by agricultural production to more than 2,000 investors last month. The 2019 bonds were issued at a yield equal to Brazil's interbank rate known as CDI, or 11.06 per cent, about 0.45 percentage point less than the average paid by companies in the local debt market.