Brasília – The raising of 1 billion euro this Thursday (27) by the Brazilian government in Europe shows the international investors’ trust in the country’s economy, said the Brazilian Treasury Secretary, Arno Augustin. According to him, the fact that the Treasure has raised the resources at low interest shows that Brazil remains attractive for foreign investors, in spite of the lowering of the credit rating of the country by the ratings agency Standard & Poor’s earlier this week.
"The issuance shows the strength of the Brazilian economy’s foundations. It shows the confidence the international market has in the country", says the secretary. He pointed out that the result will help the Brazilian companies gather more resources in the European market at a lower interest rate.
On the operation this Thursday, the National Treasure has raised 1 billion euro in seven-year bonds at 2.961% interest per year. The value is quite lower than the 5.448% per year showed last time the Brazilian government issued bonds in euro, in January 2006.
In external issuances, the government borrows money from international investors by releasing external debt bonds and committing to pay them back with interest. Lower interest rates in the transaction show smaller distrust on the investors’ part that Brazil will not be able to pay its debt.
The secretary said that the National Treasury is considering an issuance in yens, in the Japanese market. He denied that the decision of the Treasury to make an issuance in euro this Thursday was motivated by the lowering of the Brazilian government credit rating by Standard & Poor’s. "The issuance was scheduled since the beginning of the Annual Financial Plan [in the end of January]. We did not change the schedule because of this event [the lowering of Brazil’s rate]", he reinstated.
According to Augustin, the Treasury opted to issue seven-year bonds because this is the most used market by the Brazilian companies which gather resources in Europe. In the last operation of the kind, in 2006, the Brazilian government had issued nine-year bonds in euro. "Just like the more traditional market of dollar issuance are ten-year bonds, in the market in euro, most of the issuance is in seven-year ones”, he explained.
*Translated by Rodrigo Mendonça
