BNDES may receive a new injection of up to R$ 20 billion from the Treasury.

By Rodrigo Viga Gaier

RIO DE JANEIRO, Sept 11 (Reuters) - The National Bank for Economic and Social Development (BNDES) intends to finalize by the end of the month with the National Treasury the amount of the new contribution to the development bank to guarantee disbursements of approximately 190 billion reais in 2013 and resources for the beginning of 2014, a source from the institution said on Wednesday.

"We should definitely close the deal by the end of the month. It can't go past that," a senior bank executive familiar with the negotiations told Reuters. The amount under discussion and the method of the investment are still being debated, he added.

Informally, the amounts being considered by BNDES for the new investment could be up to 20 billion reais. "This would guarantee funding for this year and a little for the beginning of next year. Sometimes you think you're going to release the funds at the end of the year and they end up being released at the beginning of next year," said another source at BNDES.

A source close to the government's economic team stated that the operation "usually takes a few days to finalize," but that "the number (size of the investment) could be that."

Representatives from the National Treasury were unable to comment on the matter immediately.

Through June, BNDES disbursements totaled 88,3 billion reais, according to bank data. At the beginning of August, the institution's president, Luciano Coutinho, had stated that July's disbursements had fallen short of expectations.

One of the BNDES sources commented that in August the pace of disbursements "was maintained between 14 billion and 15 billion reais".

Demand for bank financing typically increases in the second half of the year, but in 2013 several federal infrastructure and energy concessions are expected to further increase the demand for loans.

"Funding isn't a problem. I think we'll resolve that well... what we can say is that the total (of investments) this year will be less than last year's. The trend is downward," the source said.

According to data from the National Treasury, a total of 17 billion reais in debt was issued to BNDES this year. The first issuance was made on May 10th, for 2 billion reais, specifically for the development bank's operations with the Merchant Marine Fund. A second issuance, of 15 billion reais, occurred on June 28th, with resources linked to meeting the capital levels stipulated in the Basel III agreement.

Disbursements to BNDES put pressure on the federal government's accounts, since public bonds issued for these investments impact the federal debt.

GROUP X

The latest negotiations involving the sale of EBX group assets to foreign companies and international funds were viewed favorably by BNDES executives, the sources said.

On Tuesday, businessman Eike Batista announced that he is close to finalizing an agreement to transfer control of Porto Sudeste to the trading company Trafigura and Mubadala, Abu Dhabi's sovereign wealth fund.

The first source at BNDES stated that with the completion of the sale of Porto Sudeste, another important step was taken in the restructuring of EBX's debts, and that the sale of Porto Sudeste left the bank with a "very small, almost minimal" exposure to the EBX group.

"Yesterday another important step was taken. After this (deal) everything is resolved and everything is settled," said the source.

At the end of August, the president of BNDES stated that loans from EBX group companies actually contracted with the bank totaled approximately 6 billion reais out of a total of 10 billion approved. At the time, Coutinho stated that he was confident in the equalization of the companies' debts. (With additional reporting by Luciana Otoni)