"The market liked the early discussion of the fiscal framework ... so the market has reacted well (to the new bond issue)," said Luciano Feres, economist and chief financial officer at Somus Capital. The operation was led by Bank of America, BNP Paribas and Morgan Stanley. Brazil last issued foreign debt in June 2021, raising $2.25 billion. Lula's government has vowed to issue a foreign currency bond linked to environmental criteria, but Wednesday's issuance was not that much-awaited "green bond", although the Treasury emphasized that it still aims to finalize the ESG framework for issuing a sustainable bond. The process is expected to be completed in the second half of 2023. Treasury officials have told Reuters the first green bond is likely to raise about $2 billion, possibly split in two tranches. (Reporting by Marcela Ayres; Additional reporting by Luana Maria Benedito in Sao Paulo; Editing by Brad Haynes and Richard Chang)
(Recasts with pricing details from the Treasury)
By Marcela Ayres
BRASILIA, April 5 (Reuters) - Brazil's Treasury said on
Wednesday it raised $2.25 billion in a 10-year sovereign bond
offering in U.S. dollars after the government eased investor
concerns last week with its proposed new fiscal policy.
The issuance, marking Brazil's return to the foreign market
after more than a year and a half, was priced at a yield of
6.15%, said the Treasury, confirming details reported earlier by
Reuters.
Investor demand was nearly 3-1/2 times oversubscribed, at
$7.7 billion, after initially reaching $8.5 billion, two sources
had told Reuters.
The Treasury stated that it had been monitoring the market
and that the "good moment" allowed for the operation to be
carried out on Wednesday, with the aim of promoting liquidity in
the sovereign yield curve and providing a benchmark for
corporate issuances in dollars.
Brazil's Finance Ministry last week unveiled its proposal
for new fiscal rules to balance limits on spending growth with
vows to boost social programs, lifting local financial markets
long concerned about a potential surge in public debt.
Long-term interest rates on Brazil's yield curve have eased since the ministry presented that proposal.
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