Oct. 16 (Bloomberg) -- Tam SA, Brazil’s biggest airline by passengers carried, plans to sell 10-year dollar bonds in overseas markets as it taps into investor demand for the country’s corporate debt, according to a person familiar with the transaction.

The Sao Paulo-based company hired Banco Santander SA and Citigroup Inc. to arranged the bond sale, said the person, who declined to be identified because terms aren’t set. Tam will begin pitching the notes to investors on Oct. 19, according to the person.

Brazilian companies are selling debt in international credit markets as a recovery in Latin America’s biggest economy boosts demand for the securities. Earlier this week, Brazilian construction and engineering company Construtora Norberto Odebrecht SA sold $500 million of 10-year bonds, and Banco do Brasil SA, Latin America’s largest lender, issued $1.5 billion of perpetual notes.

“Brazilian companies are taking advantage of low costs and great liquidity,” said Diego Torres, a debt analyst with ING Groep NV in New York.

The yield on Tam’s 7.375 percent dollar bonds due in 2017 fell to 8.22 percent from 19.72 percent at the end of last year, according to Bloomberg data. The bond’s price has climbed to 95.31 cents on the dollar from 50.50 cents during that period.

To contact the reporters on this story: Veronica Navarro Espinosa in New York at vespinosa@bloomberg.net

Last Updated: October 16, 2009 10:22 EDT