Rates Widen As Brazil Sells BRL833.7 Mln NTN-Bs At 6.16%-6.75% - WSJ.com

Rates Widen As Brazil Sells BRL833.7 Mln NTN-Bs At 6.16%-6.75%

BRASILIA (Dow Jones)--Brazil's federal treasury sold 833.7 million Brazilian reals ($487.83 million) worth of face-value NTN-B inflation-linked bonds of BRL1 billion on auction Tuesday at a slightly wider range of interest rates than seen at recent auctions.

The government sold bonds with six maturities ranging from November 2011, to May 2045 at average interest rates ranging from 6.16% to 6.75%. Those compared with rates of 6.24% to 6.67% at an auction of similar maturities held Oct. 20.

NTN-B bonds pay a rate equal to Brazil's official IPCA inflation rate plus an interest rate established at the auction.

Traders said the wider range of yields seen Tuesday reflected modest inflation and interest rate expectations seen over recent days.

Brazil's 12-month official IPCA index decelerated to 4.14% in mid-October from 4.34% through the end of September, while the country's reference Selic interest rate stood at 8.75% annually.

According to a weekly central bank market survey released Monday, IPCA inflation is seen ending 2010 at 4.46%, while the reference Selic rate is seen rising to 10.5% annually.

Brazil has set an annual inflation target through 2011 at 4.5%.



-By Gerald Jeffris, Dow Jones Newswires; (5561) 3335-0832; gerald.jeffris@dowjones.com"