Bloomberg News

Brazil Sells $1.25 Billion of 2023 Bonds to Yield 2.686 Percent

September 05, 2012

Brazil sold $1.25 billion of bonds in the Latin American country’s first international dollar debt sale since January.

The government sold the 2.625 percent bonds due in January 2023 to yield 2.686 percent, Brazil’s Treasury said in an e- mailed statement. The price was 99.456 cents on the dollar. The nominal yield was the lowest ever for a Brazilian bond, according to the statement.

The bonds sold to yield 110 basis points above similar- maturity U.S. Treasuries, according to the government statement. Banco BTG Pactual SA and Deutsche Bank AG arranged the offering.

Brazil returned to international markets as record low interest rates in Europe, Japan and the U.S. spur demand for higher-yielding assets. The extra yield investors demand to own Brazilian debt over Treasuries fell today two basis points, or 0.02 percentage point, to 172 basis points, according to data compiled by JPMorgan Chase & Co. The spread widened to this year’s high of 252 basis points on June 1.

“There’s demand out there for higher-quality emerging- market paper,” David Bessey, who helps manage about $16 billion of emerging-market debt including Brazilian bonds at Prudential Financial Inc. (PRU:US), said by phone from Newark, New Jersey.

Brazil sold $825 million more of its 2021 notes on Jan. 3. The yield on the 4.875 percent securities have fallen 109 basis points to 2.29 percent, or 70 basis points more than Treasuries, since the debt sale.

The country also raised 3.15 billion reais ($1.54 billion) in international markets with the sale of 12-year bonds in April, according to data compiled by Bloomberg.

To contact the reporters on this story: Veronica Navarro Espinosa in New York at vespinosa@bloomberg.net; Drew Benson in New York at abenson9@bloomberg.net

To contact the editor responsible for this story: Brendan Walsh at bwalsh8@bloomberg.net


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Companies Mentioned

  • PRU
    (Prudential Financial Inc)
    • $86.97 USD
    • -2.19
    • -2.52%
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