Brazil’s Treasury said on Wednesday it had raised $2.25 billion in an offering of 10-year sovereign dollar bonds, after the government eased investor concerns last week with its new tax proposal.
The issue, which marks Brazil’s return to the foreign market after more than a year and a half, had a yield of 6.15%, the Treasury said, confirming details previously reported by Reuters.
Investor demand was nearly three and a half times oversubscribed, at $7.7 billion, after initially reaching $8.5 billion, two sources told Reuters.
The Treasury assured that it had been monitoring the market and that “good timing” allowed the operation to take place on Wednesday, with the aim of promoting liquidity in the sovereign yield curve and providing a benchmark for corporate issues in dollars.
Last week, Brazil’s finance ministry unveiled its proposal for new fiscal rules to balance limits on spending growth with promises to boost social programs, buoying local financial markets that were concerned about a possible increase in public debt.
Long-term interest rates on Brazil’s yield curve have fallen since the ministry put out that proposal.
“The market liked the initial discussion on the fiscal framework (…) so it reacted well (to the new bond issue)”, said Luciano Feres, economist and financial director of Somus Capital.
The operation was led by Bank of America, BNP Paribas and Morgan Stanley. Brazil issued external debt for the last time in June 2021, raising US$2.25 billion.
Source: Gestion
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