Chemical Banking Corp. on Wednesday underwrote a $50 million Eurobond issue for Banco Mercantil de Sao Paulo SA, in the latest of a series of Latin deals by U.S. banks.

Chemical, which is lead manager, said it will earn 0.625% in underwriting fees and an additional 0.5% in selling fees.

The Luxembourg-registered bearer bond yields 9.15% annually. It is denominated in dollars and is being sold in units of $10,000 and $100,000.

Banco Mercantil, a Brazilian wholesale bank, will lend the proceeds to large Brazilian corporations and multinationals. The 2 1/2-year offering enables the bank to lend at longer maturities than it could through local funding.

The loans will be denominated in Brazilian cruzeiros and indexed to the U.S. dollar.

Chemical and other U.S. money-center banks have been increasing their under writings in the Eurobond market for Latin corporations and other issuers from developing countries.

Since the start of the year, Chemical has led or co-led a total of $420 million in Latin Eurobonds plus one $150 million, three-year Eurobond for the Philippines. That's up from $50 million for the same period last year.

Chemical is hoping to bring to market several more issues for Latin borrowers soon, according to sources at the bank.

Since 1990, more than 225 Latin issuers have offered about $23 billion in bonds, most with maturities of two to five years, according to research by J.P Morgan & Co.

6% of All Eurobonds

Some $21 billion in bonds are currently outstanding, equal to around 6% of the Eurobond market.

The bonds, usually issued in Luxembourg or London, are not registered with the Securities and Exchange Commission and are sold mainly to retail and institutional investors through banks in Europe.

They are generally below investment grade but have attracted buyers because most are denominated in dollars and pay interest rates significantly higher than those of U.S. corporate or government bonds.

In one of the biggest deals to date. Morgan last Thursday underwrote $1 billion in five-year Euronotes for Cemex SA, the Mexican cement company.

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