Brazil raises 1 billion euros in international market

The Brazilian government raised 1 billion euros from the American and European markets in bonds due on April 1, 2021. The sale of the bonds was led by banks BB Security, JP Morgan and Santander, announced Thursday (Mar. 27) the Secretariat of the National Treasury, connected to the Finance Ministry.

The success of the operation is made clear by low yields (the profit investors make), which reached 2.961% per year, considerably lower than its 2006 counterpart – 300 million euros, or 5.448%. According to analysts from the Secretariat of the National Treasury, this operation reported the lowest amount in euros ever raised.

Financial authorities have used the measure as an strategy to test the country’s image abroad. Brazil is to receive the funds on April 3, 2014.

By issuing bonds, the government borrows from international investors and agree to reimburse them with interest. Lower interest rates in the transaction show greater trust on the investors’s part that Brazil will eventually pay its debt.

This issue takes place after ratings agency Standard & Poor’s cut Brazil’s grade from BBB to BBB-, on a neutral outlook, which indicates it should not be downgraded in the next months.

Now the government is able to determine the tendency for raising funds from overseas in the next months for Brazil and its companies abroad.

Translated by Fabrício Ferreira