Banco do Brasil Sells $1.5 Billion of Bonds Overseas (Update1) - Bloomberg.com

By Veronica Espinosa

Oct. 13 (Bloomberg) -- Banco do Brasil SA, Latin America’s largest lender, sold $1.5 billion of perpetual bonds in the bank’s biggest overseas debt issue.

The Brasilia-based bank issued the securities to yield about 5.19 percentage points above U.S. Treasuries, according to Bloomberg data. JPMorgan Chase & Co., Citigroup Inc. and BB Securities arranged the sale of the bonds, which are callable after 11 years. A spokesman at Banco do Brasil declined to comment.

Banco do Brasil’s bond sale is part of push by Latin American companies and governments to sell debt abroad after benchmark yields tumbled. Last month, Mexico sold $1.75 billion of bonds while Brazil issued $1.25 billion of notes abroad.

The extra yield investors demand to own emerging-markets corporate bonds instead of U.S. Treasuries narrowed to 3.87 percentage points on Oct. 9 from 9.59 percentage points at the end of last year, according to JPMorgan Chase & Co.’s CEMBI Index.

Banco do Brasil sold $500 million of perpetual bonds in January 2006. The 7.95 percent securities have a call date of January 2011.

Emerging-market bond sales may reach a record this year, surpassing the $173.4 billion sold in 2007, as governments tap debt markets to cover widening budget deficits, according to ING Groep NV.

To contact the reporter on this story: Veronica Navarro Espinosa in New York at vespinosa@bloomberg.net
Last Updated: October 13, 2009 17:09 EDT"