CSN Is Said to Be on Verge of $4.4 Billion Debt Extension

(Bloomberg) -- Cia. Siderurgica Nacional SA is about to take a big step toward tidying up its debt.

The Brazilian steelmaker is nearing a deal with government-owned banks, Banco do Brasil SA and Caixa Economica Federal, to roll over about 14 billion reais ($4.4 billion) in local currency debt, three people with knowledge of the the matter said. A deal is expected to close next week at the latest, the people said, asking not to be identified because talks are private. Bonds rose.

CSN’s and Banco do Brasil’s press departments both declined to comment. Caixa Economica didn’t immediately respond to requests for comment.

With total debt of about $9 billion, the Sao Paulo-based steelmaker’s agreement with state-owned banks is seen as a key move to unlock talks with other creditors. Non-government-owned banks expect to meet with company management in the coming weeks, according to one person with knowledge of the matter.

Since last year, CSN has been weighing asset sales to help with de-leveraging. Earlier this month, Valor Economico reported that the company is considering selling its stake in fellow Brazilian steelmaker Usinas Siderurgicas de Minas Gerais SA, or Usiminas.

CSN shares jumped 5 percent to 10.85 reais at 5:22 p.m. in Sao Paulo while the company’s bonds due 2020 rose 1.3 percent.

To contact the reporters on this story: R.T. Watson in Rio de Janeiro at rwatson71@bloomberg.net, Felipe Marques in Sao Paulo at fmarques10@bloomberg.net.

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, James Attwood, Joe Richter

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