Brazil Sells $500 Million of Bonds to Yield 4.75%

Brazil Sells $500 Million of Bonds to Yield 4.75%

Dec. 15 (Bloomberg) -- Brazil sold $500 million of 10-year bonds in the country’s fifth international dollar bond offering this year.

The South American country sold the bonds to yield 4.75 percent, down from 6.13 percent in an initial offering in January and from 5.80 percent in a second sale in May. Today’s yield was 1.14 percentage points more than U.S. Treasuries. The government said in a statement it plans to sell up to $25 million of the securities in Asian markets.

Brazil tapped debt markets as a global economic recovery fuels demand for the securities. Emerging-market debt sales rose 83 percent to a record $597 billion this year, according to Bloomberg data. Brazil is returning to overseas markets after Abu Dhabi’s bailout yesterday of Dubai World boosted demand for higher-yielding assets, said Paul Biszko, emerging-markets strategist at RBC Capital Markets in Toronto.

“Brazil is using Dubai as an opportunity to issue now versus a potentially even more volatile backdrop next year,” Biszko said.

The yield on Brazil’s 5.875 percent bonds due in 2019 fell to 4.65 percent from 6.44 percent on Jan. 8, according to JPMorgan Chase & Co. The bond’s price rose to 109.02 cents on the dollar from 95.90 cents during that period.

Morgan Stanley and Goldman Sachs Group Inc. arranged today’s bond offering, said a person familiar with the transaction who declined to be identified because he’s not allowed to speak publicly.

To contact the reporters responsible for this story: Francisco Marcelino at mdeoliveira@bloomberg.net; Veronica Espinosa in New York at vespinosa@bloomberg.net.
Last Updated: December 15, 2009 16:50 EST