Brazil Firms Sell More Bonds Overseas Than at Home in January

02/07/2013| 10:50am US/Eastern

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   By Rogerio Jelmayer 
 

SAO PAULO--Brazilian companies and banks in January sold a much higher volume of bonds overseas than at home, taking advantage of low international interest rates, according to the Brazilian Financial and Capital Markets Association, or Anbima.

Overseas bonds issued by Brazilian companies totaled $4.75 billion in January, compared with just 1.33 billion Brazilian reais ($688 million) in local bonds, Anbima said Thursday.

"The beginning of this year was very strong for overseas debt issues," said Eduardo Nascimento, managing director of BB Securities in London, a unit of state-run Banco do Brasil SA (>> Banco do Brasil SA). "Last year, we also saw high volume, but now we are seeing even small players tapping the overseas debt market. Investors across the globe are looking for higher yields, even when there is more risk, as global interest rates remain at historically low levels."

Although Brazil's Selic base rate is currently at its own historic low of 7.25%, that level is much higher than base rates of major economies across the globe, with real interest rates, in many cases, at virtually zero.

In January, at least six Brazilian companies, including meatpackers JBS SA (JBSAY, JBSS3.BR), Minerva SA (MRVSY, BEEF3.BR) and Marfrig Alimentos SA (MRRTY, MRFG3.BR), sugar-and-ethanol producer Tonon Bioenergia SA, investment bank Banco BTG Pactual SA (>> Grupo BTG Pactual) and state-run bank Banco do Brasil SA (BDORY, BBAS3.BR), witnessed hefty demand for their bonds.

The strong lineup of bond issues so far this year continues a trend that started in 2012.

Last year, Brazilian companies and banks sold a record $50.5 billion in bonds, outpacing the previous record of $40.37 billion set in 2010, according to Anbima.

Currently, there are at least three other companies with plans to tap international debt markets. They are airline GOL Linhas Aereas Inteligentes SA (GOL, GOLL4.BR), agribusiness conglomerate J&F Participacoes SA, and oil and gas company Schahin Oil & Gas.

Write to Rogerio Jelmayer at rogerio.jelmayer@dowjones.com

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