Brasília – The Brazilian Treasury raised US$ 1.25 billion among American and European investors, at an annual interest rate of 2.686% – the lowest ever for international issues of Brazilian bonds. The funds were raised through a issue of foreign debt bonds maturing in January 2023, effected this Wednesday (5th).
The government loans money from international investors by issuing foreign debt bonds and committing to paying back with interest. This means Brazil will repay the funds ten years from now at the agreed interest rate, i.e. 2.686% a year.
The lowest-interest bond issue ever had been at 3.449% a year, in January. Today’s issue was the third foreign debt bond issue in 2012. In January, the Brazilian government raised US$ 825 million. In April, the Treasury made an issue denominated in reals, and raised 3.15 billion reals (US$ 1.54 billion).
According to the Treasury, the demand for Brazilian bonds enabled the lower interest rates. The demand for bonds, according to the government, outstripped the supply, but the exact figures were not disclosed.
The Treasury intends to issue another US$ 125 million in bonds in the Asian market in the next few hours. The funds raised overseas will be incorporated to the country’s foreign exchange reserves on September 12.
*Translated by Gabriel Pomerancblum
