Brazil's Embraer Seeks to Raise $500 Million from Overseas Bonds Issue

Brazilian aircraft manufacturer Embraer S.A. (ERJ, EMBR3.BR) is planning to raise $500 million from an overseas bonds issue, a person close to the transaction said Tuesday.

Earlier Tuesday, the company announced it hired Citigroup, Banco Itau BBA and Morgan Stanley to coordinate the operation.

The company said it will use the proceeds to finance its working capital.

"After positive news from Europe over the weekend, local companies saw a window of opportunity right now to tap the debt market with demand for their bonds," said the person, who declined to be named for this article.

In addition, Latin America's biggest bank by assets, Brazil's state-run Banco do Brasil S.A. (BDORY, BBAS3.BR), also is tapping the international bond market in order to raise $500 million.

Global markets cheered the weekend deal to recapitalize Spain's banking sector, which has been weighed down by bad loans doled out during the country's real estate boom. The European Union will loan Spain up to $125 billion, with the final tally set to be disclosed by independent auditors later this month. The deal eliminates, for the moment, a key pressure point in the ongoing European financial crisis.

Write to Rogerio Jelmayer at rogerio.jelmayer@dowjones.com

Banco Do Brasil (PK) (USOTC:BDORY)
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