Telefonica Brasil to issue 2 billion reais in bonds

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Brazilian mobile operator aims to raise money to pay for LTE rollout. The board of Brazilian phone company Telefonica Brasil SA, a unit of Spain’s Telefonica SA, approved the company to raise up to 2 billion Brazilian reais ($990 million) from a nonconvertible debentures issue.

The company said late Thursday that it plans to issue the proceeds to provide support of its investments in the 4G technology and also to pay some short-term debts.

The Brazilian government, which auctioned licenses for 4G technology in mid-June, wants the winners of the 4G licenses, including Telefonica Brasil, to launch the service in Brazil’s major cities in time for the Confederations Cup soccer tournament to be held in mid-2013.

The debentures will mature Sept. 10, 2017, and the company is proposing to pay an annual yield of 0.75 percentage points over the variation of local interbank rate, called DI. Telefonica Brasil operates fixed and mobile phones divisions under the brand name of Vivo.