Brazil’s interest-rate futures yields on contracts due before July 2012 rose as the central bank’s signal that it will raise rates to curb price increases offset a report showing inflation quickened less than expected.
Investors increased bets the central bank will raise its benchmark Selic interest rate, with the yield on the contract due July 2011 adding 6 basis points to 11.65 percent by 6:38 a.m. New York time, the highest intraday level since Dec. 8. On the agreement due April, the yield advanced 4 basis points to 11.15 percent.
Thursday, December 23, 2010
Thursday, December 9, 2010
Panamericano Posts Biggest Two-Day Drop Since Probe After Reserves Lifted
Banco Cruzeiro do Sul SA sank 2.3 percent to 14.75 reais. Moody’s Investors Service cut their outlook on their Ba ratings to negative from stable for four Brazilian banks -- Banco BMG SA, Banco Cruzeiro do Sul, Banco Bonsucesso SA and Banco Schahin SA. Profits may be hurt after capital requirements were increased for long-term vehicle financing and loans deducted from payroll income, Moody’s wrote.
Monday, December 6, 2010
Investors To Pay $1.8B For 18.65% Stake In Brazil's BTG Pactual
SAO PAULO (Dow Jones)--A group of investors including the sovereign wealth funds of China, Singapore and Abu Dhabi have agreed to pay $1.8 billion for an 18.65% stake in Brazilian investment bank BTG Pactual, the bank said Monday in a statement.
Wednesday, September 15, 2010
Meirelles Dollar Loan Rates Top Libor by Most in Six Months
Brazilian dollar-based loan rates are climbing to a six-month high relative to those overseas as central bank President Henrique Meirelles boosts purchases of the greenback to slow the real’s world-beating rally.
Contracts due in January known as cupom cambial, a measure of annual dollar borrowing costs in Brazil, rose to 1.89 percent on Sept. 13, the highest level since July 23. The rate has jumped 11 basis points, or 0.11 percentage point, since Sept. 8, when the central bank started holding two daily auctions to buy dollars, helping create a shortage of the U.S. currency in the Brazilian loan market.
Contracts due in January known as cupom cambial, a measure of annual dollar borrowing costs in Brazil, rose to 1.89 percent on Sept. 13, the highest level since July 23. The rate has jumped 11 basis points, or 0.11 percentage point, since Sept. 8, when the central bank started holding two daily auctions to buy dollars, helping create a shortage of the U.S. currency in the Brazilian loan market.
Thursday, September 9, 2010
BNDES Sells 750 Million Euros of 7-Year Notes to Yield 4.243%
Sept. 9 (Bloomberg) -- Brazil’s state development bank, known as BNDES, sold 750 million euros of seven-year bonds, according to a person familiar with the offering.
The notes priced to yield 4.243 percent, or 200 basis points over the benchmark mid-swap rate,
Brazilian Inflation Slows to Government Target For First Time This Year
Brazil’s consumer prices rose less than expected in August, falling under the mid-point of the government’s target for the first time this year, the national statistics agency said.
Inflation in Latin America’s biggest economy slowed to 0.04 percent in August from July, less than the 0.08 forecast by 37 analysts surveyed by Bloomberg, the national statistics agency said in a report distributed in Rio de Janeiro today. Annual inflation through August slowed to 4.49 percent, less than the 4.53 percent forecast in the survey.
Inflation in Latin America’s biggest economy slowed to 0.04 percent in August from July, less than the 0.08 forecast by 37 analysts surveyed by Bloomberg, the national statistics agency said in a report distributed in Rio de Janeiro today. Annual inflation through August slowed to 4.49 percent, less than the 4.53 percent forecast in the survey.
Thursday, September 2, 2010
Lula May Offer Real-Linked Bonds Overseas as Yields Tumble
Brazil is considering selling its first real-linked bonds in international markets in three years as yields on the securities fall to the lowest since May relative to local debt.
The government’s international real bonds maturing in 2022 yield 250 basis points, or 2.5 percentage points, less than its domestic real debt maturing in 2021, according to data compiled by Bloomberg. The difference was 184 basis points on July 1. Deputy Treasury Secretary Paulo Valle said yesterday that it’s “very probable” the government will sell foreign bonds denominated in either reais or dollars by year-end.
The yield gap between local and foreign real bonds is widening as international investors seeking alternatives to near-record low rates in the U.S., Japan and Europe pile into Brazil’s real debt issued in overseas markets. Foreigners prefer to buy the international securities because they can trade them more easily and don’t have to pay local taxes, according to Morgan Stanley.
“It’s a fantastic opportunity to issue debt in your own currency in the external market now,” said Silvia Marengo, who manages Latin American debt with Falcon Private Bank in Zurich. “It makes a lot of sense from the government’s perspective.”
The yield on the international real bonds due in 2022 has plunged 131 basis points in the past two months to 9.13 percent. Yields on the 2021 real bonds issued in the local market dropped 65 basis points over that time to 11.63 percent. The gap between the two reached 255 basis points on Aug. 27, the widest since May 7.
The government’s international real bonds maturing in 2022 yield 250 basis points, or 2.5 percentage points, less than its domestic real debt maturing in 2021, according to data compiled by Bloomberg. The difference was 184 basis points on July 1. Deputy Treasury Secretary Paulo Valle said yesterday that it’s “very probable” the government will sell foreign bonds denominated in either reais or dollars by year-end.
The yield gap between local and foreign real bonds is widening as international investors seeking alternatives to near-record low rates in the U.S., Japan and Europe pile into Brazil’s real debt issued in overseas markets. Foreigners prefer to buy the international securities because they can trade them more easily and don’t have to pay local taxes, according to Morgan Stanley.
“It’s a fantastic opportunity to issue debt in your own currency in the external market now,” said Silvia Marengo, who manages Latin American debt with Falcon Private Bank in Zurich. “It makes a lot of sense from the government’s perspective.”
The yield on the international real bonds due in 2022 has plunged 131 basis points in the past two months to 9.13 percent. Yields on the 2021 real bonds issued in the local market dropped 65 basis points over that time to 11.63 percent. The gap between the two reached 255 basis points on Aug. 27, the widest since May 7.
Wednesday, September 1, 2010
Brazil's Central Bank Keeps Rate at 10.75% as Inflation Slows Below Target
Brazil’s central bank kept its benchmark interest rate unchanged at 10.75 percent after inflation slowed below target and as the global economic recovery falters.
Brazil May Pause at 10.75% on Below-Target Inflation, Slower Global Growth
Brazil’s central bank will probably keep its benchmark interest rate unchanged today after three straight increases as inflation has slowed below target and the global economic recovery falters.
Policy makers, meeting for the last time before October’s presidential election, will hold the benchmark rate at 10.75 percent, according to 46 of 57 economists surveyed by Bloomberg. Seven economists forecast a quarter-point increase, and four expect a half-point rise, betting higher borrowing costs are needed to prevent a rebound in inflation next year.
Policy makers, meeting for the last time before October’s presidential election, will hold the benchmark rate at 10.75 percent, according to 46 of 57 economists surveyed by Bloomberg. Seven economists forecast a quarter-point increase, and four expect a half-point rise, betting higher borrowing costs are needed to prevent a rebound in inflation next year.
Sunday, August 29, 2010
Greenspan Conundrum Is Lula's Gain as Long-Term Yields Sink
The biggest foreign purchases of Brazilian local bonds in three years are pushing longer-term borrowing costs below yields on two-year debt for the first time since October 2008.
Yields on fixed-rate government bonds due in 2017 have declined 106 basis points, or 1.06 percentage points, in the past three months to 11.49 percent. The plunge in 2017 yields put them as much as eight basis points below yields on notes maturing in 2012 last week. A year ago, longer bonds yielded 171 basis points more than the shorter-term securities.
Record low yields in the U.S. and Europe spurred foreigners to buy a net $16 billion of Brazilian bonds from January through July, compared with $9.1 billion for all of 2009, according to the central bank. International investors are piling into longer-term debt, helping trim President Luiz Inacio Lula da Silva’s borrowing costs, in part as a bet slowing inflation will push down rates in coming years, according to Citigroup Inc.
“We are seeing relentless inflows,” Dirk Willer, head of Latin America local markets strategy at Citigroup in New York, said in a telephone interview. “Some of the investors are betting on the convergence trade.”
Yields on fixed-rate government bonds due in 2017 have declined 106 basis points, or 1.06 percentage points, in the past three months to 11.49 percent. The plunge in 2017 yields put them as much as eight basis points below yields on notes maturing in 2012 last week. A year ago, longer bonds yielded 171 basis points more than the shorter-term securities.
Record low yields in the U.S. and Europe spurred foreigners to buy a net $16 billion of Brazilian bonds from January through July, compared with $9.1 billion for all of 2009, according to the central bank. International investors are piling into longer-term debt, helping trim President Luiz Inacio Lula da Silva’s borrowing costs, in part as a bet slowing inflation will push down rates in coming years, according to Citigroup Inc.
“We are seeing relentless inflows,” Dirk Willer, head of Latin America local markets strategy at Citigroup in New York, said in a telephone interview. “Some of the investors are betting on the convergence trade.”
Wednesday, August 25, 2010
Brazil Interest Rate Futures Drop to 11-Month Low on Global Growth Concern
Yields on Brazil’s interest-rate futures contracts declined to an 11-month low on speculation slowing global economic growth may prompt Central Bank President Henrique Meirelles to stop raising interest rates.
The yield on the contract due in January 2012 fell two basis points, or 0.02 percentage point, to 11.13 percent, the lowest level since September, at 9:22 a.m. New York time. At 10.69 percent, the contracts due in January 2011 imply the central bank may keep its benchmark borrowing costs at 10.75 percent for the remaining three policy meetings this year.
The yield on the contract due in January 2012 fell two basis points, or 0.02 percentage point, to 11.13 percent, the lowest level since September, at 9:22 a.m. New York time. At 10.69 percent, the contracts due in January 2011 imply the central bank may keep its benchmark borrowing costs at 10.75 percent for the remaining three policy meetings this year.
Wednesday, May 12, 2010
Itau Sees Brazil GDP Growing 7.5% ‘Chinese-Like’ Pace in 2010
Itau Sees Brazil GDP Growing 7.5% ‘Chinese-Like’ Pace in 2010
May 12 (Bloomberg) -- Brazil’s economy will grow at a faster, “Chinese-like rate” this year as a result of a stronger global economy and measures taken to stimulate domestic demand, Itau Unibanco Holding SA said.
Latin America’s biggest economy should expand 7.5 percent this year, above a previous estimate for 6.5 percent,
May 12 (Bloomberg) -- Brazil’s economy will grow at a faster, “Chinese-like rate” this year as a result of a stronger global economy and measures taken to stimulate domestic demand, Itau Unibanco Holding SA said.
Latin America’s biggest economy should expand 7.5 percent this year, above a previous estimate for 6.5 percent,
Friday, April 30, 2010
Brazil Boosts BNDES Lending Capacity by $20.7 Billion
April 30 (Bloomberg) -- Brazil’s state development bank will have an additional 36 billion reais ($20.7 billion) to lend under a plan announced by the Treasury today.
Brazil’s Treasury will exchange 1.3 billion reais of shares it owns in Centrais Eletricas Brasileiras SA, a state-controlled power utility, for shares in state-controlled Banco do Brasil SA owned by development bank known as BNDES, said Charles Guedes, a Treasury official. The Treasury will also transfer to the bank a credit of 2.7 billion reais owed to it by Eletrobras, as Latin America’s biggest utility is known.
The two measures will boost capital levels at the development bank, giving it more room to make loans. BNDES can include the Eletrobras shares as part of its capital, while rules didn’t allow shares in Banco do Brasil to be counted as capital.
Brazil’s Treasury will exchange 1.3 billion reais of shares it owns in Centrais Eletricas Brasileiras SA, a state-controlled power utility, for shares in state-controlled Banco do Brasil SA owned by development bank known as BNDES, said Charles Guedes, a Treasury official. The Treasury will also transfer to the bank a credit of 2.7 billion reais owed to it by Eletrobras, as Latin America’s biggest utility is known.
The two measures will boost capital levels at the development bank, giving it more room to make loans. BNDES can include the Eletrobras shares as part of its capital, while rules didn’t allow shares in Banco do Brasil to be counted as capital.
Brazil Trades A-Rated as Growth Makes Debt Safer
April 30 (Bloomberg) -- Brazil’s credit rating, raised to investment grade two years ago, is poised to increase as the economy grows at the fastest pace since 2007, trading in credit- default swaps shows. The cost to protect Brazil bonds, ranked BBB- by Standard & Poor’s, from default for five years fell seven basis points this month to 123 basis points, or 1.23 percentage points, according to data compiled by CMA DataVision. In Europe, where Greece’s spreading debt crisis led to downgrades this week, swaps on Portugal almost doubled this month to 2.78 points, even though its debt is rated A-, three levels higher than Brazil.
Thursday, April 29, 2010
Eletrobras May Swap $2.7 Billion of Debt for Shares
April 29 (Bloomberg) -- Centrais Eletricas Brasileiras SA, Latin America’s largest utility, is seeking to convert 4.7 billion reais ($2.7 billion) of liabilities to the Brazil’s government into shares, the finance chief said.
Tuesday, April 27, 2010
Rates Rise As Brazil Sells BRL408M Inflation-Indexed NTN-Bs - WSJ.com
RIO DE JANEIRO (Dow Jones)--The Brazilian Treasury sold 408 million Brazilian reals ($231 million) worth of inflation-indexed NTN-B bonds at an auction Tuesday, with interest rates rising on emerging-market volatility and expectations for higher local interest rates.
The government sold slightly more than 80% of the BRL500 million worth of bonds on offer Tuesday. The bonds came in three maturities between 2013 and 2020.
The government sold the bonds at average interest rates ranging from 6.50% to 6.75%.
The government sold slightly more than 80% of the BRL500 million worth of bonds on offer Tuesday. The bonds came in three maturities between 2013 and 2020.
The government sold the bonds at average interest rates ranging from 6.50% to 6.75%.
Tuesday, April 20, 2010
Brazil Federal Debt Stable In March At BRL1.495 Trillion-Govt
BRASILIA (Dow Jones)--Brazil's total federal debt load remained stable in March at 1.495 trillion Brazilian reals ($857 billion) under the contrasting influence during the period of debt amortization and interest accrual, the government reported Tuesday.
Brazil March Tax Revenue BRL59.42B, Up 6.1% Vs 2009
BRASILIA (Dow Jones)--Reflecting the continuation of a local economic recovery, Brazilian federal tax revenue rose in March to a record level for the month, the federal tax department reported Tuesday.
Brazil’s Mid-Month Inflation Rises to 11-Month High
April 20 (Bloomberg) -- Brazil’s mid-month inflation accelerated to a 11-month high in April, reinforcing speculation the central bank next week will raise interest rates for the first time since 2008 to keep prices in check.
Friday, April 16, 2010
Brazil Raises $787.5M From Overseas Bonds Issue
SAO PAULO (Dow Jones)--The Brazilian government, through National Treasury, said Friday that it raised a total of $787.5 million from an issue of dollar-denominated sovereign global bond due January 2021, more than the $750 million previously announced.
The increase in the final amount was prompted by an extra offer of bonds of $37.5 million to Asian investors, the government said. The bonds were issued at 115.6 basis points over Treasurys to yield 5% a year.
The increase in the final amount was prompted by an extra offer of bonds of $37.5 million to Asian investors, the government said. The bonds were issued at 115.6 basis points over Treasurys to yield 5% a year.
Thursday, April 15, 2010
China, Brazil sign deals at shortened BRIC summit
* Hu Jintao shortened Latin America trip after China quake
* BRIC summit moved forward to Thursday
* China to invest in Brazil steel plant, oil sector (Adds Lula quote, Iran, details)
By Raymond Colitt and Emma Graham-Harrison
BRASILIA, April 15 (Reuters) - China and Brazil bolstered their growing ties with trade and investment agreements on Thursday before a summit of the world's top four emerging markets that was cut back after China's leader decided to return home to deal with a major earthquake.
* BRIC summit moved forward to Thursday
* China to invest in Brazil steel plant, oil sector (Adds Lula quote, Iran, details)
By Raymond Colitt and Emma Graham-Harrison
BRASILIA, April 15 (Reuters) - China and Brazil bolstered their growing ties with trade and investment agreements on Thursday before a summit of the world's top four emerging markets that was cut back after China's leader decided to return home to deal with a major earthquake.
Tuesday, April 6, 2010
Brazil to pump more cash into Eletrobras
NEW YORK, April 6 (Reuters) - Brazil's government will replenish the capital base of Eletrobras, the country's largest power holding company, this year as part of a plan to boost transparency and lure investment into electricity, O Estado de S. Paulo said on Tuesday, citing Treasury Secretary Arno Augustin.
Under the program, Eletrobras would absorb previously autonomous regional units, Augustin told Estado. The company will start paying about $6 billion in dividends overdue for more than 30 years in June, a move seen by most analysts as an important step toward more transparent management.
The dividend issue 'put hurdles on any discussion over the Eletrobras capitalization, but that step has been cleared and the capitalization will take place this year,' Augustin said in the interview.
Under the program, Eletrobras would absorb previously autonomous regional units, Augustin told Estado. The company will start paying about $6 billion in dividends overdue for more than 30 years in June, a move seen by most analysts as an important step toward more transparent management.
The dividend issue 'put hurdles on any discussion over the Eletrobras capitalization, but that step has been cleared and the capitalization will take place this year,' Augustin said in the interview.
Wednesday, March 31, 2010
Brazil Eletrobras proposes equal shareholder dividend
RIO DE JANEIRO, March 31 (Reuters) - Brazil's state-controlled electricity company Eletrobras on Wednesday proposed giving equal treatment to holders of common and preferred shares for its 2009 dividend payment in a move aimed at boosting transparency.
Eletrobras (ELET6.SA) has for years set aside the equivalent of 6 percent of shareholder equity to pay dividends for holders of its preferred stock.
It will now set aside an equivalent amount for dividends for common shares, which are mostly held by Brazil's government, helping Eletrobras trim tax debts, Eletrobras Finance Director Astrogildo Quental said in an interview.
Eletrobras (ELET6.SA) has for years set aside the equivalent of 6 percent of shareholder equity to pay dividends for holders of its preferred stock.
It will now set aside an equivalent amount for dividends for common shares, which are mostly held by Brazil's government, helping Eletrobras trim tax debts, Eletrobras Finance Director Astrogildo Quental said in an interview.
Thursday, March 18, 2010
Brazil posts record tax revenue for a February
Brazil posts record tax revenue for a February
* Economic growth boosts tax collections
* 2010 tax income expected to grow 12 percent
BRASILIA, March 18 (Reuters) - Brazil's tax revenue soared to a record for the month of February on the back of a fast-growing economy and will grow 12 percent this year, the government said on Thursday.
Tax income, adjusted for inflation, jumped to 53.5 billion reais ($29.8 billion) in February, an increase of 13.23 percent over February last year, data from Brazil's national tax authority showed.
In January, tax revenues had totaled 73.6 billion reais.
* Economic growth boosts tax collections
* 2010 tax income expected to grow 12 percent
BRASILIA, March 18 (Reuters) - Brazil's tax revenue soared to a record for the month of February on the back of a fast-growing economy and will grow 12 percent this year, the government said on Thursday.
Tax income, adjusted for inflation, jumped to 53.5 billion reais ($29.8 billion) in February, an increase of 13.23 percent over February last year, data from Brazil's national tax authority showed.
In January, tax revenues had totaled 73.6 billion reais.
Tuesday, March 16, 2010
Banco Bradesco Launches $750M 5Yr Bond;175 BPs Over Treasurys
Banco Bradesco Launches $750M 5Yr Bond;175 BPs Over Treasurys
NEW YORK (Dow Jones)--Banco Bradesco (BBD), Brazil's second-largest private bank, launched a $750 million, five-year-bond deal Tuesday, offering a premium of 175 basis points over comparable U.S. Treasury notes, according to a person familiar with the deal.
The bonds are rated Baa2 by Moody's and BBB by Standard & Poor's.
NEW YORK (Dow Jones)--Banco Bradesco (BBD), Brazil's second-largest private bank, launched a $750 million, five-year-bond deal Tuesday, offering a premium of 175 basis points over comparable U.S. Treasury notes, according to a person familiar with the deal.
The bonds are rated Baa2 by Moody's and BBB by Standard & Poor's.
Monday, March 15, 2010
Petrobras Will Raise Up to $60 Billion in Share Issue
Petrobras Will Raise Up to $60 Billion in Share Issue
March 15 (Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-run oil company, will issue as much as $60 billion of new stock, most of which will go to the government in exchange for oil rights, Energy Minister Edison Lobao said.
“Petrobras has no funding problems,” Lobao told reporters today in Sao Paulo. He said the company will issue between $40 billion and $60 billion of new stock. “The share sale will help us to diversify our funding sources.”
March 15 (Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-run oil company, will issue as much as $60 billion of new stock, most of which will go to the government in exchange for oil rights, Energy Minister Edison Lobao said.
“Petrobras has no funding problems,” Lobao told reporters today in Sao Paulo. He said the company will issue between $40 billion and $60 billion of new stock. “The share sale will help us to diversify our funding sources.”
Banco Bradesco to Sell Benchmark Dollar Bond Overseas
Banco Bradesco to Sell Benchmark Dollar Bond Overseas
March 15 (Bloomberg) -- Banco Bradesco SA, Brazil’s second- largest lender by market value, plans to sell benchmark dollar bonds in its second overseas debt issue since September, said a person familiar with the transaction.
Goldman Sachs Group Inc., Banco Bradesco and Banco Votorantim will arrange the five-year bond offering, said the person, who declined to be identified because terms aren’t set. A benchmark sale typically means at least $500 million in size. The Osasco, Brazil-based bank sold $750 million of 10-year notes in September.
Banco Bradesco is returning to international bond markets after the company’s borrowing costs tumbled. The yield on Bradesco’s 6.75 percent bonds due in 2019 sank 44 basis points since September to 5.94 percent, the lowest since the securities were issued, according to data compiled by Bloomberg.
Brazil's Eletrobras to invest $5.1 bln in 2010 | Reuters
UPDATE 1-Brazil's Eletrobras to invest $5.1 bln in 2010
SAO PAULO, March 15 (Reuters) - Brazilian state-owned power utility Eletrobras (ELET6.SA) will boost investment by about two-thirds this year mainly for the some of the largest hydropower dam and electricity transmission projects in the nation, the company's chief executive said on Monday.
Eletrobras, Latin America's largest power holding utility, plans to increase investment to 9 billion reais ($5.1 billion) this year from 5.4 billion reais in 2009, CEO Jose Antonio Muniz said. Investments would total around 15 billion reais for 2011-2012, excluding new projects in which the company could take part, he added.
SAO PAULO, March 15 (Reuters) - Brazilian state-owned power utility Eletrobras (ELET6.SA) will boost investment by about two-thirds this year mainly for the some of the largest hydropower dam and electricity transmission projects in the nation, the company's chief executive said on Monday.
Eletrobras, Latin America's largest power holding utility, plans to increase investment to 9 billion reais ($5.1 billion) this year from 5.4 billion reais in 2009, CEO Jose Antonio Muniz said. Investments would total around 15 billion reais for 2011-2012, excluding new projects in which the company could take part, he added.
Friday, March 5, 2010
Mantega Says Brazil Currency Situation Not ‘Ideal’
Mantega Says Brazil Currency Situation Not ‘Ideal’
March 5 (Bloomberg) -- Brazilian Finance Minister Guido Mantega said today the country’s currency situation isn’t “ideal,” signaling the government may step up interventions in the market as it seeks to temper the real’s gains.
“We have a relatively stable situation now,” Mantega said today in a speech from Sao Paulo. “It’s not an ideal situation. We haven’t resolved the competitiveness issue.”
March 5 (Bloomberg) -- Brazilian Finance Minister Guido Mantega said today the country’s currency situation isn’t “ideal,” signaling the government may step up interventions in the market as it seeks to temper the real’s gains.
“We have a relatively stable situation now,” Mantega said today in a speech from Sao Paulo. “It’s not an ideal situation. We haven’t resolved the competitiveness issue.”
Wednesday, March 3, 2010
Latin Bond Sales to Rebound, Credit Suisse, BofA Say
Latin Bond Sales to Rebound, Credit Suisse, BofA Say
March 4 (Bloomberg) -- Latin American governments and companies will step up international bond sales in coming weeks after issuance slumped to a six-month low in February amid concern Greece will default, Credit Suisse Group AG and Bank of America Corp. said.
Sales totaled $1.8 billion last month, the lowest tally since August and down from $7.9 billion in January, according to data compiled by Bloomberg. Chile, which is seeking financing after its worst earthquake in five decades, may be among issuers to sell debt as markets open back up, said Michael Schoen, head of Latin American debt capital markets at Credit Suisse.
March 4 (Bloomberg) -- Latin American governments and companies will step up international bond sales in coming weeks after issuance slumped to a six-month low in February amid concern Greece will default, Credit Suisse Group AG and Bank of America Corp. said.
Sales totaled $1.8 billion last month, the lowest tally since August and down from $7.9 billion in January, according to data compiled by Bloomberg. Chile, which is seeking financing after its worst earthquake in five decades, may be among issuers to sell debt as markets open back up, said Michael Schoen, head of Latin American debt capital markets at Credit Suisse.
Petrobras May Issue $40 Billion of Shares, BNDES Says
Petrobras May Issue $40 Billion of Shares, BNDES Says
March 3 (Bloomberg) -- Petroleo Brasileiro SA’s biggest minority shareholder said the state-controlled company may issue up to $40 billion in shares, less than some analysts forecast, as part of a plan to swap stock for oil off Brazil’s coast.
The capitalization “could be $35 billion to $40 billion,” said Luciano Coutinho, president of the BNDES, Brazil’s state development bank and a Petrobras shareholder. “It will be the largest public offering ever in global markets,” Coutinho said today in a Bloomberg television interview.
Credit Suisse, in a Feb. 10 note to clients, forecast the share sale to reach as much as $50 billion, with about $30 billion of stock going to the government in exchange for 5 billion barrels of offshore oil and the rest offered to minority shareholders. JPMorgan Chase & Co. analysts in a note yesterday forecast the capital increase at $40 billion.
March 3 (Bloomberg) -- Petroleo Brasileiro SA’s biggest minority shareholder said the state-controlled company may issue up to $40 billion in shares, less than some analysts forecast, as part of a plan to swap stock for oil off Brazil’s coast.
The capitalization “could be $35 billion to $40 billion,” said Luciano Coutinho, president of the BNDES, Brazil’s state development bank and a Petrobras shareholder. “It will be the largest public offering ever in global markets,” Coutinho said today in a Bloomberg television interview.
Credit Suisse, in a Feb. 10 note to clients, forecast the share sale to reach as much as $50 billion, with about $30 billion of stock going to the government in exchange for 5 billion barrels of offshore oil and the rest offered to minority shareholders. JPMorgan Chase & Co. analysts in a note yesterday forecast the capital increase at $40 billion.
Monday, March 1, 2010
Brazil Merchant Bank BTG Buys Stake In Local Mitsubishi - WSJ.com
Brazil Merchant Bank BTG Buys Stake In Local Mitsubishi
SAO PAULO (Dow Jones)--Brazilian merchant bank BTG Pactual said Monday that it has acquired a minority stake in Mitsubishi Motors do Brasil in a bet that the country's auto market will grow for decades to come.
'There is no exit strategy with this purchase,' said Carlos Fonseca, president of the private-equity division at BTG. 'We are not in this for the short or medium term. This is a long-term marriage that is confident the Brazilian economy will expand and that the auto market will grow along with it,' he said.
Eduardo Sousa Ramos, president of Mitsubishi Motors in Brazil, said that the two have been courting each other since early 2009. BTG will gain one seat on the five-member board. No figures were given for the deal, announced late Monday.
'We did not seek out BTG because we are looking to increase capital or looking for funding for new projects,' Ramos said. 'BTG will have a small stake in the company and it will allow us to have access to long-term financial resources that will help us better plan for the Mitsubishi's future in Brazil,' he said.
Mitsubishi opened its first Brazilian assembly line in September 1998. It makes the costly twin cabin L200 pick-up in Brazil.
Mitsubishi, a unit of Japan's Mitsubishi Motors Corp. (MMTOY, 7211.TO), is a small auto company in Brazil. It was ranked the No. 7 seller of pick-up trucks and sport-utility vehicles in January with a 5.8% market share, according to sales reported last month by the National Automotive Dealerships Association, or Fenabrave.
Fiat SpA (FIATY, F.MI), General Motors Co. and Volkswagen (VLKAY, VOW.XE) were the top three with a combined market share of 50.4%.
Brazil sold 3.1 million vehicles in 2009, up from 2.8 million in 2008. Expectations are for the industry to sell at least 3.3 million in 2010.
-By Kenneth Rapoza, Dow Jones Newswires; 5511-2847-4541; kenneth.rapoza@dowjones.com
SAO PAULO (Dow Jones)--Brazilian merchant bank BTG Pactual said Monday that it has acquired a minority stake in Mitsubishi Motors do Brasil in a bet that the country's auto market will grow for decades to come.
'There is no exit strategy with this purchase,' said Carlos Fonseca, president of the private-equity division at BTG. 'We are not in this for the short or medium term. This is a long-term marriage that is confident the Brazilian economy will expand and that the auto market will grow along with it,' he said.
Eduardo Sousa Ramos, president of Mitsubishi Motors in Brazil, said that the two have been courting each other since early 2009. BTG will gain one seat on the five-member board. No figures were given for the deal, announced late Monday.
'We did not seek out BTG because we are looking to increase capital or looking for funding for new projects,' Ramos said. 'BTG will have a small stake in the company and it will allow us to have access to long-term financial resources that will help us better plan for the Mitsubishi's future in Brazil,' he said.
Mitsubishi opened its first Brazilian assembly line in September 1998. It makes the costly twin cabin L200 pick-up in Brazil.
Mitsubishi, a unit of Japan's Mitsubishi Motors Corp. (MMTOY, 7211.TO), is a small auto company in Brazil. It was ranked the No. 7 seller of pick-up trucks and sport-utility vehicles in January with a 5.8% market share, according to sales reported last month by the National Automotive Dealerships Association, or Fenabrave.
Fiat SpA (FIATY, F.MI), General Motors Co. and Volkswagen (VLKAY, VOW.XE) were the top three with a combined market share of 50.4%.
Brazil sold 3.1 million vehicles in 2009, up from 2.8 million in 2008. Expectations are for the industry to sell at least 3.3 million in 2010.
-By Kenneth Rapoza, Dow Jones Newswires; 5511-2847-4541; kenneth.rapoza@dowjones.com
Brazil's Camargo Correa To Issue $1.66B In Commercial Papers
Brazil's Camargo Correa To Issue $1.66B In Commercial Papers
SAO PAULO (Dow Jones)-Brazil's construction company Camargo Correa SA is planning to raise about 3 billion Brazilian reals ($1.66 billion) from the issue of commercial papers, Fitch rating agency said in a press release late Friday.
The company will use the proceeds of the issue to finance the acquisition of a minority stake in Portuguese cement maker Cimentos de Portugal, or Cimpor (CPR.LB).
Earlier this year, the company reached agreements to acquire a 31.12% stake in Cimpor, for a total amount of approximately BRL3.5 billion.
'Strategically, Fitch views the acquisition positively. It will allow Camargo to increase its presence in the global cement market, and it should result in synergies with Camargo's highly correlated core businesses (cement, engineering and construction). Cimpor's presence in 13 countries, including Brazil where it operates six cement plants and 32 ready mix units, would further improve Camargo's geographic diversification,' Fitch said.
The commercial papers, which would mature in six months, was rated at F1(bra) by Fitch.
Camargo Correa is one of the largest private industrial conglomerates in Brazil. As a holding company, Camargo has full ownership interests in cement, engineering and construction companies and controlling positions in homebuilding, textiles, footwear and sportswear manufacturing companies. It also has equity interests in energy, transportation (highway concessions) and steel businesses.
-By Rogerio Jelmayer, Dow Jones Newswires; 5511-2847-4521; rogerio.jelmayer@dowjones.com
SAO PAULO (Dow Jones)-Brazil's construction company Camargo Correa SA is planning to raise about 3 billion Brazilian reals ($1.66 billion) from the issue of commercial papers, Fitch rating agency said in a press release late Friday.
The company will use the proceeds of the issue to finance the acquisition of a minority stake in Portuguese cement maker Cimentos de Portugal, or Cimpor (CPR.LB).
Earlier this year, the company reached agreements to acquire a 31.12% stake in Cimpor, for a total amount of approximately BRL3.5 billion.
'Strategically, Fitch views the acquisition positively. It will allow Camargo to increase its presence in the global cement market, and it should result in synergies with Camargo's highly correlated core businesses (cement, engineering and construction). Cimpor's presence in 13 countries, including Brazil where it operates six cement plants and 32 ready mix units, would further improve Camargo's geographic diversification,' Fitch said.
The commercial papers, which would mature in six months, was rated at F1(bra) by Fitch.
Camargo Correa is one of the largest private industrial conglomerates in Brazil. As a holding company, Camargo has full ownership interests in cement, engineering and construction companies and controlling positions in homebuilding, textiles, footwear and sportswear manufacturing companies. It also has equity interests in energy, transportation (highway concessions) and steel businesses.
-By Rogerio Jelmayer, Dow Jones Newswires; 5511-2847-4521; rogerio.jelmayer@dowjones.com
Wednesday, February 24, 2010
Brazil Raises Reserve Requirements as Crisis Eases
Brazil Raises Reserve Requirements as Crisis Eases
Feb. 24 (Bloomberg) -- Brazil’s central bank raised reserve requirements for banks, demanding they deposit an additional 71 billion reais ($39 billion), as policy makers end rules designed to increase liquidity during the global credit crunch.
“There is no more need for these measures,” central bank President Henrique Meirelles told reporters in Brasilia today. “The liquidity conditions are already adequate.”
Feb. 24 (Bloomberg) -- Brazil’s central bank raised reserve requirements for banks, demanding they deposit an additional 71 billion reais ($39 billion), as policy makers end rules designed to increase liquidity during the global credit crunch.
“There is no more need for these measures,” central bank President Henrique Meirelles told reporters in Brasilia today. “The liquidity conditions are already adequate.”
Tuesday, February 23, 2010
Arrecadação federal cresce 14% e bate recorde em janeiro
Arrecadação federal cresce 14% e bate recorde em janeiro
A arrecadação de impostos e tributos de janeiro deste ano atingiu a marca dos R$ 73 bilhões e é recorde para o mês. O crescimento real é de 13,64% em comparação a janeiro de 2009. No início do ano passado, a arrecadação federal somou pouco mais de R$ 64 bilhões - corrigida pelo Índice de Preços ao Consumidor Amplo (IPCA) - e foi prejudicada pelas medidas de desoneração adotadas pelo governo para amenizar os efeitos da crise financeira mundial.
De acordo com Raimundo Eloi de Carvalho, coordenador-geral de Estudos, Previsão e Análise da Receita Federal, o crescimento expressivo começou em outubro do ano passado, quando os efeitos da crise mundial foram amenizados.
'Esse recorde decorreu da recuperação dos indicadores macroeconômicos, principalmente do aumento da produção industrial, da quantidade de vendas e da lucratividade de empresas', disse.
A média mensal da perda com desonerações fiscais no ano passado, segundo Carvalho, ficou em cerca de R$ 2,5 bilhões. Raimundo Eloi de Carvalho afirma que em 2010, a situação será diferente.
A arrecadação de impostos e tributos de janeiro deste ano atingiu a marca dos R$ 73 bilhões e é recorde para o mês. O crescimento real é de 13,64% em comparação a janeiro de 2009. No início do ano passado, a arrecadação federal somou pouco mais de R$ 64 bilhões - corrigida pelo Índice de Preços ao Consumidor Amplo (IPCA) - e foi prejudicada pelas medidas de desoneração adotadas pelo governo para amenizar os efeitos da crise financeira mundial.
De acordo com Raimundo Eloi de Carvalho, coordenador-geral de Estudos, Previsão e Análise da Receita Federal, o crescimento expressivo começou em outubro do ano passado, quando os efeitos da crise mundial foram amenizados.
'Esse recorde decorreu da recuperação dos indicadores macroeconômicos, principalmente do aumento da produção industrial, da quantidade de vendas e da lucratividade de empresas', disse.
A média mensal da perda com desonerações fiscais no ano passado, segundo Carvalho, ficou em cerca de R$ 2,5 bilhões. Raimundo Eloi de Carvalho afirma que em 2010, a situação será diferente.
Monday, February 22, 2010
Brazil Forms Sovereign Wealth Fund Advisory Board - WSJ.com
Brazil Forms Sovereign Wealth Fund Advisory Board
BRASILIA (Dow Jones)--Moving forward with the administration of its recently created sovereign wealth fund, Brazil's government on Monday established a special advisory board to supervise the fund's investment decisions, according to a presidential decree published in the country's federal register.
Under the decree, the board will be headed by the country's Finance Minister, Guido Mantega, and will also include Planning Minister Paulo Bernardo and the president of the country's central bank, Henrique Meirelles.
Votes from only two of the board's three members will be necessary, however, to ratify decisions on the fund's investments.
The board will meet regularly on a quarterly basis, though extraordinary board meetings can be called by its president.
Among its responsibilities, the board will approve investment return targets, ratify the fund's budgeting decisions, and create a technical consulting committee.
Brazil created the sovereign wealth fund in late 2007 with the aim of reinforcing public sector savings and funding projects of strategic interest abroad.
The sovereign wealth fund currently manages 16.3 billion Brazilian reals ($9 billion), up from 14.3 billion when it was established in late 2008.
According to the fund's rules, fund investments overseas must obtain a minimum return equivalent to the six-month London Interbank Offered Rate. Investments in Brazil must obtain a minimum return equivalent to the country's TJLP long-term interest rate, currently at 6% annually.
The fund also will be free to buy dollars in the local currency market as part of its investment strategy.
Upon formalization of the fund's management rules in December, the government named central bank career employee Luiz Claudio Portela as the chief administrator for its day-to-day operations.
-By Gerald Jeffris, Dow Jones Newswires; 5561-3335-0832; gerald.jeffris@dowjones.com
BRASILIA (Dow Jones)--Moving forward with the administration of its recently created sovereign wealth fund, Brazil's government on Monday established a special advisory board to supervise the fund's investment decisions, according to a presidential decree published in the country's federal register.
Under the decree, the board will be headed by the country's Finance Minister, Guido Mantega, and will also include Planning Minister Paulo Bernardo and the president of the country's central bank, Henrique Meirelles.
Votes from only two of the board's three members will be necessary, however, to ratify decisions on the fund's investments.
The board will meet regularly on a quarterly basis, though extraordinary board meetings can be called by its president.
Among its responsibilities, the board will approve investment return targets, ratify the fund's budgeting decisions, and create a technical consulting committee.
Brazil created the sovereign wealth fund in late 2007 with the aim of reinforcing public sector savings and funding projects of strategic interest abroad.
The sovereign wealth fund currently manages 16.3 billion Brazilian reals ($9 billion), up from 14.3 billion when it was established in late 2008.
According to the fund's rules, fund investments overseas must obtain a minimum return equivalent to the six-month London Interbank Offered Rate. Investments in Brazil must obtain a minimum return equivalent to the country's TJLP long-term interest rate, currently at 6% annually.
The fund also will be free to buy dollars in the local currency market as part of its investment strategy.
Upon formalization of the fund's management rules in December, the government named central bank career employee Luiz Claudio Portela as the chief administrator for its day-to-day operations.
-By Gerald Jeffris, Dow Jones Newswires; 5561-3335-0832; gerald.jeffris@dowjones.com
Thursday, February 18, 2010
Rates Lower As Brazil Sells BRL4.03B LTNs At 9.78%-11.93% - WSJ.com
Rates Lower As Brazil Sells BRL4.03B LTNs At 9.78%-11.93% - WSJ.com: "RIO DE JANEIRO (Dow Jones)--Rates were mostly lower Thursday in the Brazil National Treasury's sale of fixed-rate LTN and NTN-F bonds due to greater demand.
The government sold 4.027 billion Brazilian reals in fixed-rate LTN bonds out of BRL4.5 billion ($2.46 billion) offered.
The bonds were sold in two different maturities, October 2010 and July 2012, at average interest rates ranging from 9.78% to 11.93%.
The government sold 4.027 billion Brazilian reals in fixed-rate LTN bonds out of BRL4.5 billion ($2.46 billion) offered.
The bonds were sold in two different maturities, October 2010 and July 2012, at average interest rates ranging from 9.78% to 11.93%.
Friday, February 12, 2010
Brazil's Cetip in talks with Germany's Clearstream | Reuters
Brazil's Cetip in talks with Germany's Clearstream
SAO PAULO, Feb 12 (Reuters) - Brazil clearinghouse Cetip (CTIP3.SA) said on Friday it is in strategic cooperation talks with Deutsche Borse AG's (DB1Gn.DE) Clearstream.
CETIP is the largest custodian of corporate fixed income securities in Latin America.
The possible deal will include joint development and distribution of collateral management services Cetip offers to its participants, Cetip said in a statement to securities regulator CVM.
Clearstream is a leading securities depository.
Cetip shares closed 0.6 percent higher on Friday, while Brazil's benchmark Bovespa stock index .BVSP fell 0.4 percent. (Reporting by Daniela Machado; writing by Raymond Colitt; editing by Andre Grenon)"
SAO PAULO, Feb 12 (Reuters) - Brazil clearinghouse Cetip (CTIP3.SA) said on Friday it is in strategic cooperation talks with Deutsche Borse AG's (DB1Gn.DE) Clearstream.
CETIP is the largest custodian of corporate fixed income securities in Latin America.
The possible deal will include joint development and distribution of collateral management services Cetip offers to its participants, Cetip said in a statement to securities regulator CVM.
Clearstream is a leading securities depository.
Cetip shares closed 0.6 percent higher on Friday, while Brazil's benchmark Bovespa stock index .BVSP fell 0.4 percent. (Reporting by Daniela Machado; writing by Raymond Colitt; editing by Andre Grenon)"
Monday, February 1, 2010
Goldman Sachs Says Buy Brazil’s Real Following Tumble
Goldman Sachs Says Buy Brazil’s Real Following Tumble
Feb. 1 (Bloomberg) -- Goldman Sachs Group Inc. recommended investors buy Brazil’s real, saying the country’s “strong” economic growth will spark a rebound after it posted the worst rout among major currencies last month.
“Brazil’s growth has remained strong and is accelerating,” currency analysts including London-based Thomas Stolper wrote in a research note to clients. “Together with cyclical assets moving back to a more constructive view of the world, a more hawkish central bank stance could support a return of the Brazilian real towards the lower end of the recent trading ranges.”
Goldman Sachs, which called the real the world’s most “overvalued” currency as recently as Dec. 15, recommended clients buy it at 1.8870 per dollar, predicting the real will advance to 1.75. Investors should exit the trade if the real were to slide to 1.94, the Goldman Sachs analysts said.
Feb. 1 (Bloomberg) -- Goldman Sachs Group Inc. recommended investors buy Brazil’s real, saying the country’s “strong” economic growth will spark a rebound after it posted the worst rout among major currencies last month.
“Brazil’s growth has remained strong and is accelerating,” currency analysts including London-based Thomas Stolper wrote in a research note to clients. “Together with cyclical assets moving back to a more constructive view of the world, a more hawkish central bank stance could support a return of the Brazilian real towards the lower end of the recent trading ranges.”
Goldman Sachs, which called the real the world’s most “overvalued” currency as recently as Dec. 15, recommended clients buy it at 1.8870 per dollar, predicting the real will advance to 1.75. Investors should exit the trade if the real were to slide to 1.94, the Goldman Sachs analysts said.
Friday, January 22, 2010
Brazil's Braskem Set To Become Global Petrochemicals Player - WSJ.com
Brazil's Braskem Set To Become Global Petrochemicals Player
RIO DE JANEIRO (Dow Jones)--Brazilian petrochemicals giant Braskem SA (BAK, BRKM5.BR) will gain much-needed muscle to compete on the global stage with a deal for rival Quattor Petroquimica SA (SZPQ4.BR).
Earlier Friday, Quattor holding company Unipar (UNIP5.BR) said that it had agreed to sell its stake in the company to Braskem for 870 million Brazilian reals ($478 million).
The widely anticipated deal, which first appeared on the radar last August, will create the world's sixth-largest producer of plastic resins. Braskem, already Latin America's largest petrochemicals company, will now have the scale to compete with global players such as Dow Chemical Co. (DOW) and BASF SE (BASFY, BAS.XE).
The fusion will allow closely held industrial conglomerate Odebrecht and state-run energy giant Petreleo Brasileiro SA (PBR, PETR4.BR), or Petrobras, to form the so-called 'Nova Braskem,' or new Braskem. The combined Braskem-Quattor will have revenue of about BRL30 billion.
Odebrecht will control the new company with a 53.8% stake, while Petrobras will retain the remaining 46.2%. Odebrecht and Petrobras will share strategic decisions at Braskem.
The share breakdown could face questions from antitrust regulators.
The deal effectively nationalizes Brazil's petrochemicals industry in the hands of Petrobras. The combined Braskem-Quattor would produce 100% of Brazil's polyethylene, polypropylene and PVC--resins used to produce everything from kitchen utensils to auto parts.
Braskem said it will raise between BRL4.5 billion and BRL5 billion in new capital through a share offer. A holding company formed by Odebrecht and Petrobras, called BRK, will subscribe to BRL3.5 billion of the share offer.
The deal should end a contentious legal fight brought by one of the members of the Geyer family, which controlled Unipar, seeking to thwart the merger.
The deal had been under way since mid-2009, when Braskem, Petrobras and Quattor acknowledged talks on a 'strategic alliance.' India's Reliance Industries Ltd. (500325.BY) was also rumored to be in talks with Quattor about a possible acquisition.
Brazil's petrochemicals industry was privatized in the mid-1990s as stakes in 27 companies were sold, raising $3.7 billion for the government. But intense competition in the sector resulted in consolidation starting in 2001.
The two largest players, Braskem and Quattor, solidified their positions in 2008.
Quattor was formed when Petrobras bought Suzano Petroquimica and consolidated those assets with those held by Unipar to form Brazil's second-largest petrochemicals company behind Braskem.
Petrobras also teamed with Braskem to purchase the petrochemicals assets of Ipiranga. Petrobras then rolled some of its petrochemical assets into Braskem in exchange for a 40% stake in the company.
Petrobras shares were fractionally higher at BRL34.34 in early trading on the Sao Paulo Stock Exchange. Braskem shares jumped 2.9% to BRL14.34, while Unipar shares were halted at BRL2.94. The broader market as measured by the Ibovespa stocks index was 0.4% lower at 66,005 points.
-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; Jeff.Fick@dowjones.com
RIO DE JANEIRO (Dow Jones)--Brazilian petrochemicals giant Braskem SA (BAK, BRKM5.BR) will gain much-needed muscle to compete on the global stage with a deal for rival Quattor Petroquimica SA (SZPQ4.BR).
Earlier Friday, Quattor holding company Unipar (UNIP5.BR) said that it had agreed to sell its stake in the company to Braskem for 870 million Brazilian reals ($478 million).
The widely anticipated deal, which first appeared on the radar last August, will create the world's sixth-largest producer of plastic resins. Braskem, already Latin America's largest petrochemicals company, will now have the scale to compete with global players such as Dow Chemical Co. (DOW) and BASF SE (BASFY, BAS.XE).
The fusion will allow closely held industrial conglomerate Odebrecht and state-run energy giant Petreleo Brasileiro SA (PBR, PETR4.BR), or Petrobras, to form the so-called 'Nova Braskem,' or new Braskem. The combined Braskem-Quattor will have revenue of about BRL30 billion.
Odebrecht will control the new company with a 53.8% stake, while Petrobras will retain the remaining 46.2%. Odebrecht and Petrobras will share strategic decisions at Braskem.
The share breakdown could face questions from antitrust regulators.
The deal effectively nationalizes Brazil's petrochemicals industry in the hands of Petrobras. The combined Braskem-Quattor would produce 100% of Brazil's polyethylene, polypropylene and PVC--resins used to produce everything from kitchen utensils to auto parts.
Braskem said it will raise between BRL4.5 billion and BRL5 billion in new capital through a share offer. A holding company formed by Odebrecht and Petrobras, called BRK, will subscribe to BRL3.5 billion of the share offer.
The deal should end a contentious legal fight brought by one of the members of the Geyer family, which controlled Unipar, seeking to thwart the merger.
The deal had been under way since mid-2009, when Braskem, Petrobras and Quattor acknowledged talks on a 'strategic alliance.' India's Reliance Industries Ltd. (500325.BY) was also rumored to be in talks with Quattor about a possible acquisition.
Brazil's petrochemicals industry was privatized in the mid-1990s as stakes in 27 companies were sold, raising $3.7 billion for the government. But intense competition in the sector resulted in consolidation starting in 2001.
The two largest players, Braskem and Quattor, solidified their positions in 2008.
Quattor was formed when Petrobras bought Suzano Petroquimica and consolidated those assets with those held by Unipar to form Brazil's second-largest petrochemicals company behind Braskem.
Petrobras also teamed with Braskem to purchase the petrochemicals assets of Ipiranga. Petrobras then rolled some of its petrochemical assets into Braskem in exchange for a 40% stake in the company.
Petrobras shares were fractionally higher at BRL34.34 in early trading on the Sao Paulo Stock Exchange. Braskem shares jumped 2.9% to BRL14.34, while Unipar shares were halted at BRL2.94. The broader market as measured by the Ibovespa stocks index was 0.4% lower at 66,005 points.
-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; Jeff.Fick@dowjones.com
Thursday, January 21, 2010
Brazil's Mantega Paints Positive Picture At Cabinet Meeting - WSJ.com
Brazil's Mantega Paints Positive Picture At Cabinet Meeting
SAO PAULO (Dow Jones)--Brazil is riding the crest of an economic wave with international investors, local consumers and industrial leaders all optimistic about the country's prospects for 2010 and beyond, Finance Minister Guido Mantega told a cabinet meeting Thursday.
According to his presentation, the Finance Ministry expects Brazil's gross domestic product to grow 5.2% in 2010 and average growth to remain at around 5% for the next five years.
The economy is returning to growth at levels seen before the global economic crisis and those levels will be sustainable in the years to come because inflation is under control, the government is committed to fiscal responsibility, exposure to external risk is low and investment levels are high, Mantega said.
The figures presented by the finance minister were broadly in line with market expectations.
He noted that the economy is being driven by domestic demand, which is seen growing 7.3% in 2010, recovering from an estimated 0.1% drop in 2009.
Meanwhile, investment levels are expected to jump this year. Gross fixed capital formation is seen rising 16.1% in 2010, bouncing back from a decline of 10.0% last year, according to government projections.
Industrial production is seen up 7.1% in 2010 after declining an estimated 5.3% last year.
However, Mantega did touch on one negative facet of the economy, namely the deterioration of the country's current account.
His presentation indicated Brazil's current account deficit would widen to 2.09% of GDP in 2010 from 1.55% in 2009.
-By Alastair Stewart, Dow Jones Newswires; 5511 2847-4520; alastaiir.stewart@dowjones.com"
SAO PAULO (Dow Jones)--Brazil is riding the crest of an economic wave with international investors, local consumers and industrial leaders all optimistic about the country's prospects for 2010 and beyond, Finance Minister Guido Mantega told a cabinet meeting Thursday.
According to his presentation, the Finance Ministry expects Brazil's gross domestic product to grow 5.2% in 2010 and average growth to remain at around 5% for the next five years.
The economy is returning to growth at levels seen before the global economic crisis and those levels will be sustainable in the years to come because inflation is under control, the government is committed to fiscal responsibility, exposure to external risk is low and investment levels are high, Mantega said.
The figures presented by the finance minister were broadly in line with market expectations.
He noted that the economy is being driven by domestic demand, which is seen growing 7.3% in 2010, recovering from an estimated 0.1% drop in 2009.
Meanwhile, investment levels are expected to jump this year. Gross fixed capital formation is seen rising 16.1% in 2010, bouncing back from a decline of 10.0% last year, according to government projections.
Industrial production is seen up 7.1% in 2010 after declining an estimated 5.3% last year.
However, Mantega did touch on one negative facet of the economy, namely the deterioration of the country's current account.
His presentation indicated Brazil's current account deficit would widen to 2.09% of GDP in 2010 from 1.55% in 2009.
-By Alastair Stewart, Dow Jones Newswires; 5511 2847-4520; alastaiir.stewart@dowjones.com"
Itau Raises Target On Brazil's Eletrobras ADRs To $31.00 - WSJ.com
Itau Raises Target On Brazil's Eletrobras ADRs To $31.00
SAO PAULO (Dow Jones)--Itau Securities raised the level it considers fair value on shares of Brazil energy company Centrais Eletricas Brasileiras (EBR), or Eletrobras, for the year ending 2010, Itau said in a report Thursday.
The new target price for Eletrobras' American Depositary Receipts is $31 each and the new target for the local shares (ELET3.BR) was raised to 53.40 Brazilian reals ($30) from a previous fair value price of BRL41.50.
Itau cited provisional measure MP 466, which finally became law on Dec. 9 and provides new subsidies to the company's northern electric power operations, coupled with the recent BRL12 billion capitalization of Eletrobras' subsidiaries like Furnas and Chesf.
Another plus is continued talks between Eletrobras and the government for the payment of billions in back dividends from the 1970s.
'The company has been dishing out over a billion reals a year for many years to account for these back payments. Once these debts are paid, it clears the company from having to account for that money on its balance sheet and improves greatly Eletrobras' corporate governance,' said Eduardo Cancian, one of the report's authors.
Eletrobras alleged that it could not pay dividend payments decades ago because its dollar debts surpassed its cash position, and therefore it did not have the money to pay investors.
Itau said it expects 'positive news flow throughout 2010 to keep boosting the stocks.'
The bank also said it suspected Eletrobras would 'strengthen...independent of who the winner' will be in Brazil's 2010 presidential elections between opposition candidate and Sao Paulo state governor Jose Serra and President Luiz Inacio Lula da Silva's chosen successor, Dilma Rousseff, currently chief of staff.
Eletrobras is a federal holding company operating 39% of Brazil's total installed capacity. The company produces more than 39,000 megawatts. It operates the massive Itaipu hydroelectric power station, the largest in Brazil.
On Thursday, Eletrobras shares were trading up 2.26% to BRL37.53. Its preferred shares (ELET6.BR) were up 1.3% to BRL31.30. Both were outperforming the Ibovespa stock index, down 1.03% to 67,497 points in the early afternoon hours.
In New York, Eletrobras' ADRs were up 1.68% to $21.16.
-By Kenneth Rapoza, Dow Jones Newswires, 5511-2847-4541, kenneth.rapoza@dowjones.com"
SAO PAULO (Dow Jones)--Itau Securities raised the level it considers fair value on shares of Brazil energy company Centrais Eletricas Brasileiras (EBR), or Eletrobras, for the year ending 2010, Itau said in a report Thursday.
The new target price for Eletrobras' American Depositary Receipts is $31 each and the new target for the local shares (ELET3.BR) was raised to 53.40 Brazilian reals ($30) from a previous fair value price of BRL41.50.
Itau cited provisional measure MP 466, which finally became law on Dec. 9 and provides new subsidies to the company's northern electric power operations, coupled with the recent BRL12 billion capitalization of Eletrobras' subsidiaries like Furnas and Chesf.
Another plus is continued talks between Eletrobras and the government for the payment of billions in back dividends from the 1970s.
'The company has been dishing out over a billion reals a year for many years to account for these back payments. Once these debts are paid, it clears the company from having to account for that money on its balance sheet and improves greatly Eletrobras' corporate governance,' said Eduardo Cancian, one of the report's authors.
Eletrobras alleged that it could not pay dividend payments decades ago because its dollar debts surpassed its cash position, and therefore it did not have the money to pay investors.
Itau said it expects 'positive news flow throughout 2010 to keep boosting the stocks.'
The bank also said it suspected Eletrobras would 'strengthen...independent of who the winner' will be in Brazil's 2010 presidential elections between opposition candidate and Sao Paulo state governor Jose Serra and President Luiz Inacio Lula da Silva's chosen successor, Dilma Rousseff, currently chief of staff.
Eletrobras is a federal holding company operating 39% of Brazil's total installed capacity. The company produces more than 39,000 megawatts. It operates the massive Itaipu hydroelectric power station, the largest in Brazil.
On Thursday, Eletrobras shares were trading up 2.26% to BRL37.53. Its preferred shares (ELET6.BR) were up 1.3% to BRL31.30. Both were outperforming the Ibovespa stock index, down 1.03% to 67,497 points in the early afternoon hours.
In New York, Eletrobras' ADRs were up 1.68% to $21.16.
-By Kenneth Rapoza, Dow Jones Newswires, 5511-2847-4541, kenneth.rapoza@dowjones.com"
Friday, January 15, 2010
Banco do Brasil Sells $1 Billion of Bonds Overseas (Update2) - Bloomberg.com
Banco do Brasil Sells $1 Billion of Bonds Overseas
Jan. 15 (Bloomberg) -- Banco do Brasil SA, Latin America’s biggest bank, sold $1 billion of bonds in its second international dollar debt sale in three months.
The Brasilia-based bank issued $500 million of 10-year dollar bonds to yield about 2.38 percentage points above U.S. Treasuries and $500 million of five-year bonds to yield 2.2 percentage points more than Treasuries, according to Bloomberg data.
Banco do Brasil returned to the market after demand topped $14 billion for a bond sale in October, Chief Financial Officer Ivan de Souza Monteiro said in an interview last month. Today’s sale follows overseas debt issues by Banco Votorantim SA, Banco Industrial e Comercial SA and state development bank BNDES this month, part of an effort to boost lending in Latin America’s biggest economy.
“Brazilian banks have been very aggressive lending money in the local market,” said RBC Capital Markets analyst Eduardo Suarez, who is based in Toronto. “It’s a good time to get long- term financing to maintain their lending activity.”
Loan growth for Banco do Brasil and the banking industry will exceed 20 percent this year as the rebound in the country’s economy prompts companies and consumers to increase borrowing, Monteiro said.
The 8.5 percent perpetual bonds the bank sold in October yield about 3.83 percentage points over U.S. Treasuries due 2019, compared with an issue spread of 5.19 percentage points, according to data compiled by Bloomberg.
Banco do Brasil’s sale today is part of a push by emerging- market companies and governments to lock in lower borrowing costs before central banks begin raising interest rates.
Deutsche Bank AG, JPMorgan Chase & Co., BB Securities and Banco Votorantim arranged today’s transaction.
To contact the reporters on this story: Lester Pimentel at lpimentel1@bloomberg.net; Veronica Navarro Espinosa in New York at vespinosa@bloomberg.net
Last Updated: January 15, 2010 14:59 EST"
Jan. 15 (Bloomberg) -- Banco do Brasil SA, Latin America’s biggest bank, sold $1 billion of bonds in its second international dollar debt sale in three months.
The Brasilia-based bank issued $500 million of 10-year dollar bonds to yield about 2.38 percentage points above U.S. Treasuries and $500 million of five-year bonds to yield 2.2 percentage points more than Treasuries, according to Bloomberg data.
Banco do Brasil returned to the market after demand topped $14 billion for a bond sale in October, Chief Financial Officer Ivan de Souza Monteiro said in an interview last month. Today’s sale follows overseas debt issues by Banco Votorantim SA, Banco Industrial e Comercial SA and state development bank BNDES this month, part of an effort to boost lending in Latin America’s biggest economy.
“Brazilian banks have been very aggressive lending money in the local market,” said RBC Capital Markets analyst Eduardo Suarez, who is based in Toronto. “It’s a good time to get long- term financing to maintain their lending activity.”
Loan growth for Banco do Brasil and the banking industry will exceed 20 percent this year as the rebound in the country’s economy prompts companies and consumers to increase borrowing, Monteiro said.
The 8.5 percent perpetual bonds the bank sold in October yield about 3.83 percentage points over U.S. Treasuries due 2019, compared with an issue spread of 5.19 percentage points, according to data compiled by Bloomberg.
Banco do Brasil’s sale today is part of a push by emerging- market companies and governments to lock in lower borrowing costs before central banks begin raising interest rates.
Deutsche Bank AG, JPMorgan Chase & Co., BB Securities and Banco Votorantim arranged today’s transaction.
To contact the reporters on this story: Lester Pimentel at lpimentel1@bloomberg.net; Veronica Navarro Espinosa in New York at vespinosa@bloomberg.net
Last Updated: January 15, 2010 14:59 EST"
Tuesday, January 12, 2010
Banco do Brasil in Talks to Arrange 9 Billion Reais Dam Loan - Bloomberg.com
Banco do Brasil in Talks to Arrange 9 Billion Reais Dam Loan
Jan. 13 (Bloomberg) -- Banco do Brasil SA, Latin America’s largest lender by assets, has begun talks with banks and companies to arrange a loan of about 9 billion reais ($5.1 billion) to help finance construction of an Amazon dam project.
The bank is negotiating with five to six banks and with companies that may bid to build the Belo Monte hydroelectric dam, Sandro Marcondes, Banco do Brasil’s commercial director, said in a telephone interview from Brasilia. The companies include GDF Suez, Camargo Correa SA, Odebrecht SA, Cia. Energetica de Minas Energia, Neoenergia and Centrais Eletricas Brasileiras SA units Chesf and Eletronorte, he said.
“We are working with companies and Brazil’s state development bank to identify risks associated with the project,” Marcondes said.
BNDES, as the country’s state development bank is known, may also provide 12 billion reais in financing for the project, Marcondes said. Banco do Brasil estimates the 11,000-meagawatt hydroelectric dam may cost about 26 billion reais. The bank doesn’t have a final estimate for the project as Brazilian government hasn’t set the auction rules.
The state development bank will announce the terms of financing once the government sets the auction date, said a BNDES spokesman who declined be identified in accordance with the bank’s policy.
Dam Projects
Brazil will set the auction date for the Belo Monte dam after environmental agency Ibama grants a permit, Energy Minister Edison Lobao said in December. Ibama hasn’t said set a date to announce the license, said spokeswoman who declined to be indentified in accordance with agency policy.
Last year, BNDES lent 6.1 billion reais to a group of companies led by Odebrecht to build Jirau and 7.2 billion reais to GDF Suez and its partners for the construction of the Santo Antonio dam.
Odebrecht is considering bidding in the Belo Monte auction, a company’s spokeswoman said. Spokespeople at Eletrobras, as the Chesf and Eletronorte controlling shareholder is known, Cia. Energetica de Minas Energia, GDF Suez and Camargo Correa didn’t return calls seeking comment from Bloomberg News. A Neoenergia spokeswoman declined to comment.
To contact the reporter on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net
Last Updated: January 12, 2010 21:00 EST
Jan. 13 (Bloomberg) -- Banco do Brasil SA, Latin America’s largest lender by assets, has begun talks with banks and companies to arrange a loan of about 9 billion reais ($5.1 billion) to help finance construction of an Amazon dam project.
The bank is negotiating with five to six banks and with companies that may bid to build the Belo Monte hydroelectric dam, Sandro Marcondes, Banco do Brasil’s commercial director, said in a telephone interview from Brasilia. The companies include GDF Suez, Camargo Correa SA, Odebrecht SA, Cia. Energetica de Minas Energia, Neoenergia and Centrais Eletricas Brasileiras SA units Chesf and Eletronorte, he said.
“We are working with companies and Brazil’s state development bank to identify risks associated with the project,” Marcondes said.
BNDES, as the country’s state development bank is known, may also provide 12 billion reais in financing for the project, Marcondes said. Banco do Brasil estimates the 11,000-meagawatt hydroelectric dam may cost about 26 billion reais. The bank doesn’t have a final estimate for the project as Brazilian government hasn’t set the auction rules.
The state development bank will announce the terms of financing once the government sets the auction date, said a BNDES spokesman who declined be identified in accordance with the bank’s policy.
Dam Projects
Brazil will set the auction date for the Belo Monte dam after environmental agency Ibama grants a permit, Energy Minister Edison Lobao said in December. Ibama hasn’t said set a date to announce the license, said spokeswoman who declined to be indentified in accordance with agency policy.
Last year, BNDES lent 6.1 billion reais to a group of companies led by Odebrecht to build Jirau and 7.2 billion reais to GDF Suez and its partners for the construction of the Santo Antonio dam.
Odebrecht is considering bidding in the Belo Monte auction, a company’s spokeswoman said. Spokespeople at Eletrobras, as the Chesf and Eletronorte controlling shareholder is known, Cia. Energetica de Minas Energia, GDF Suez and Camargo Correa didn’t return calls seeking comment from Bloomberg News. A Neoenergia spokeswoman declined to comment.
To contact the reporter on this story: Francisco Marcelino in Sao Paulo at mdeoliveira@bloomberg.net
Last Updated: January 12, 2010 21:00 EST
Monday, January 11, 2010
Brazil to choose France's Rafale jet-govt source | Reuters
* Lula to choose French Rafale jets for Brazil fleet
* Brazil still seeking lower price for Rafale order
* Air force prefers Swedish plane
BRASILIA, Jan 11 (Reuters) - President Luiz Inacio Lula da Silva will choose the French-made Rafale jet as Brazil's next-generation fighter plane but wants to negotiate a lower price, a cabinet member told Reuters on Monday.
Lula will opt to buy 36 Rafale multi-role aircraft made by France's Dassault Aviation (AVMD.PA) despite the Brazilian Air Force's preference for the Gripen NG made by Sweden's Saab (SAABb.ST), said the minister, speaking on condition of anonymity.
'The government doesn't decide under pressure from anybody, not even the Air Force. The ball is in the court of the French,' said the minister, 'If they reduce the price, we'll close the deal soon.'
The Rafale is reported to have the highest price of the three finalists in the bidding process, which includes the Boeing Co (BA.N) F-18.
Last week local media reported the Air Force preferred the Gripen NG because it had a lower purchase and maintenance cost and would allow for more technology to be transferred to Brazil.
Lula's government said in September it was entering final negotiations with France to acquire the Rafale. Brazil has a strategic defense agreement with France worth billions of dollars, including the local assembly of helicopters and submarines.
Unlike the Rafale, which is a finished product, the Gripen NG would be developed with Brazilian participation, according to an Air Force report cited by local newspapers.
The deal, which could initially be worth more than $4 billion, has sparked fierce competition among aircraft manufacturers.
Latin America's largest country is seeking a generous technology transfer offer and local assembly. The deal could eventually rise to more than 100 aircraft.
Lula said last year that his final decision on which planes Brazil buys would be political rather than technical. (Writing by Raymond Colitt; editing by John Wallace)
By Natuza Nery
Mon Jan 11, 2010 2:49pm EST
Brazil to choose France's Rafale jet-govt source
* Brazil still seeking lower price for Rafale order
* Air force prefers Swedish plane
BRASILIA, Jan 11 (Reuters) - President Luiz Inacio Lula da Silva will choose the French-made Rafale jet as Brazil's next-generation fighter plane but wants to negotiate a lower price, a cabinet member told Reuters on Monday.
Lula will opt to buy 36 Rafale multi-role aircraft made by France's Dassault Aviation (AVMD.PA) despite the Brazilian Air Force's preference for the Gripen NG made by Sweden's Saab (SAABb.ST), said the minister, speaking on condition of anonymity.
'The government doesn't decide under pressure from anybody, not even the Air Force. The ball is in the court of the French,' said the minister, 'If they reduce the price, we'll close the deal soon.'
The Rafale is reported to have the highest price of the three finalists in the bidding process, which includes the Boeing Co (BA.N) F-18.
Last week local media reported the Air Force preferred the Gripen NG because it had a lower purchase and maintenance cost and would allow for more technology to be transferred to Brazil.
Lula's government said in September it was entering final negotiations with France to acquire the Rafale. Brazil has a strategic defense agreement with France worth billions of dollars, including the local assembly of helicopters and submarines.
Unlike the Rafale, which is a finished product, the Gripen NG would be developed with Brazilian participation, according to an Air Force report cited by local newspapers.
The deal, which could initially be worth more than $4 billion, has sparked fierce competition among aircraft manufacturers.
Latin America's largest country is seeking a generous technology transfer offer and local assembly. The deal could eventually rise to more than 100 aircraft.
Lula said last year that his final decision on which planes Brazil buys would be political rather than technical. (Writing by Raymond Colitt; editing by John Wallace)
By Natuza Nery
Mon Jan 11, 2010 2:49pm EST
Brazil to choose France's Rafale jet-govt source
Thursday, January 7, 2010
Brazil Carry-Trade Flows to Climb, StanChart Says
Jan. 7 (Bloomberg) -- Carry-trade investment flows into Brazil will climb this year as traders tap into central bank rate increases that will likely send benchmark borrowing costs above 10 percent, according to Standard Chartered Plc.
Carry trades, in which investors buy higher-yielding assets with money borrowed in nations with lower rates, will pick up as Brazil lifts the overnight interbank target from a record low of 8.75 percent to stem inflation as the economy rebounds, said Mike Moran, a senior currency strategist at Standard Chartered.
Moran, one of the most accurate forecasters in a Bloomberg survey of the real’s world-beating rally last year, predicts these flows will help the real advance to an 11-year high of 1.55 per dollar by year-end. That contrasts with the 1.75-per- dollar year-end call from BNP Paribas SA, the best Brazil real predictor last year among forecasts made at the end of 2008.
“We see stronger growth and higher rates boosting carry trades,” Moran said in a telephone interview from New York.
Carry trades, in which investors buy higher-yielding assets with money borrowed in nations with lower rates, will pick up as Brazil lifts the overnight interbank target from a record low of 8.75 percent to stem inflation as the economy rebounds, said Mike Moran, a senior currency strategist at Standard Chartered.
Moran, one of the most accurate forecasters in a Bloomberg survey of the real’s world-beating rally last year, predicts these flows will help the real advance to an 11-year high of 1.55 per dollar by year-end. That contrasts with the 1.75-per- dollar year-end call from BNP Paribas SA, the best Brazil real predictor last year among forecasts made at the end of 2008.
“We see stronger growth and higher rates boosting carry trades,” Moran said in a telephone interview from New York.
Wednesday, January 6, 2010
Gross Says Brazil Debt Attractive, Rates ‘Significantly High’ - Bloomberg.com
Gross Says Brazil Debt Attractive, Rates ‘Significantly High’ - Bloomberg.com
Jan. 6 (Bloomberg) -- Brazilian debt is “attractive” because the country’s inflation-adjusted interest rates are “significantly” higher than in the U.S., Bill Gross, manager of the world’s largest bond fund at Pacific Investment Management Co., said in an interview on CNBC.
“We still like selected emerging markets on the fixed- income side to the extent that some emerging markets, like Brazil, have significantly high real interest rates,” said Gross in the interview. “I’m talking about 4, 5, 6 percent higher than the U.S. That’s an attractive situation if the credit is an improving one. Certainly that’s the case in Brazil.”
Brazil’s zero-coupon local-currency bond maturing in July 2011 yielded 11.26 percent today, compared with its annual inflation rate of 4.2 percent in November. Yield on the benchmark two-year Treasury note was 1 percent today, compared with the inflation rate of 1.8 percent in the U.S.
To contact the reporter on this story: Ye Xie in New York at yxie6@bloomberg.net
Last Updated: January 6, 2010 15:46 EST"
Jan. 6 (Bloomberg) -- Brazilian debt is “attractive” because the country’s inflation-adjusted interest rates are “significantly” higher than in the U.S., Bill Gross, manager of the world’s largest bond fund at Pacific Investment Management Co., said in an interview on CNBC.
“We still like selected emerging markets on the fixed- income side to the extent that some emerging markets, like Brazil, have significantly high real interest rates,” said Gross in the interview. “I’m talking about 4, 5, 6 percent higher than the U.S. That’s an attractive situation if the credit is an improving one. Certainly that’s the case in Brazil.”
Brazil’s zero-coupon local-currency bond maturing in July 2011 yielded 11.26 percent today, compared with its annual inflation rate of 4.2 percent in November. Yield on the benchmark two-year Treasury note was 1 percent today, compared with the inflation rate of 1.8 percent in the U.S.
To contact the reporter on this story: Ye Xie in New York at yxie6@bloomberg.net
Last Updated: January 6, 2010 15:46 EST"
Tuesday, January 5, 2010
BNDES Sells $1 Billion of Bonds in Overseas Markets
Jan. 5 (Bloomberg) -- Brazil’s state development bank sold $1 billion of 10-year bonds today, marking the beginning of what analysts say will be a push by companies to secure financing ahead of October’s presidential election.
BNDES, as the bank is known, sold the bonds to yield 5.63 percent, or 187.5 basis points more than U.S. Treasuries. That yield spread is down from 300 basis points, or three percentage points, when it issued 10-year notes in its last overseas offering in June, according to data compiled by Bloomberg.
Rio de Janeiro-based BNDES is tapping debt markets before investors grow more cautious about buying the country’s corporate debt during the presidential campaign season, said Eric Ollom, chief strategist for emerging markets at Jefferies Group Inc. in New York.
“Brazil’s got a special case,” Ollom said. “For the six months of the year they have a very open window, but in the third quarter there’s going to be a lot of talk about the election. If I’m a Brazilian entity planning to sell debt, I’d rather do it sooner rather than later.” [more...]
BNDES, as the bank is known, sold the bonds to yield 5.63 percent, or 187.5 basis points more than U.S. Treasuries. That yield spread is down from 300 basis points, or three percentage points, when it issued 10-year notes in its last overseas offering in June, according to data compiled by Bloomberg.
Rio de Janeiro-based BNDES is tapping debt markets before investors grow more cautious about buying the country’s corporate debt during the presidential campaign season, said Eric Ollom, chief strategist for emerging markets at Jefferies Group Inc. in New York.
“Brazil’s got a special case,” Ollom said. “For the six months of the year they have a very open window, but in the third quarter there’s going to be a lot of talk about the election. If I’m a Brazilian entity planning to sell debt, I’d rather do it sooner rather than later.” [more...]
Brazil Air Force prefers Swedish jets-report | Reuters
Brazil Air Force prefers Swedish jets-report
BRASILIA, Jan 5 (Reuters) - The Brazilian Air Force would prefer to buy its next-generation fighter jets from Sweden, putting it at odds with President Luiz Inacio Lula da Silva's preference for French planes, media reported on Tuesday.
The deal, which could initially be worth more than $4 billion, has sparked fierce competition among aircraft manufacturers.
An Air Force report presented to Defense Minister Nelson Jobim said Sweden's Saab (SAABb.ST) had presented the best overall project among the three finalists, Folha de Sao Paulo newspaper reported on Tuesday.
The U.S.-made Boeing (BA.N) F18 was runner-up in the report, and France's Dassault Aviation (AVMD.PA) placed last with its Rafale jet.
The Brazilian government said last year that it was in the final stages of talks to acquire the Rafale.
Accused by critics of cutting short the bidding process, the government insisted no final decision had been made. Lula said he would have the final word and that his decision would be political and strategic.
Brazil has signed a strategic defense agreement with France worth billions of dollars, including the local assembly of helicopters and conventional and nuclear-powered submarines.
Brazil is seeking a generous technology transfer offer and local assembly as part of a contract to buy 36 jet fighters. The deal could eventually rise to more than 100 aircraft.
Saab's Gripen NG jet had a lower purchase and maintenance cost and would allow for more technology to be transferred to Brazil, Folha cited the Air Force report as saying.
Unlike the Rafale, which is a finished product, the Gripen NG would be developed with Brazilian participation, the Air Force said according to Folha.
The Veja news magazine reported this week that Jobim told friends there might not be a decision on the deal before he steps down in April to run for public office in October general elections.
For more than a decade, Brazil has been studying how to replace its aging fleet of fighter jets.
The Air Force declined to comment, and the defense ministry was not immediately available to comment. (Reporting by Raymond Colitt; Editing by Lisa Von Ahn)
Tue Jan 5, 2010 8:59am EST
BRASILIA, Jan 5 (Reuters) - The Brazilian Air Force would prefer to buy its next-generation fighter jets from Sweden, putting it at odds with President Luiz Inacio Lula da Silva's preference for French planes, media reported on Tuesday.
The deal, which could initially be worth more than $4 billion, has sparked fierce competition among aircraft manufacturers.
An Air Force report presented to Defense Minister Nelson Jobim said Sweden's Saab (SAABb.ST) had presented the best overall project among the three finalists, Folha de Sao Paulo newspaper reported on Tuesday.
The U.S.-made Boeing (BA.N) F18 was runner-up in the report, and France's Dassault Aviation (AVMD.PA) placed last with its Rafale jet.
The Brazilian government said last year that it was in the final stages of talks to acquire the Rafale.
Accused by critics of cutting short the bidding process, the government insisted no final decision had been made. Lula said he would have the final word and that his decision would be political and strategic.
Brazil has signed a strategic defense agreement with France worth billions of dollars, including the local assembly of helicopters and conventional and nuclear-powered submarines.
Brazil is seeking a generous technology transfer offer and local assembly as part of a contract to buy 36 jet fighters. The deal could eventually rise to more than 100 aircraft.
Saab's Gripen NG jet had a lower purchase and maintenance cost and would allow for more technology to be transferred to Brazil, Folha cited the Air Force report as saying.
Unlike the Rafale, which is a finished product, the Gripen NG would be developed with Brazilian participation, the Air Force said according to Folha.
The Veja news magazine reported this week that Jobim told friends there might not be a decision on the deal before he steps down in April to run for public office in October general elections.
For more than a decade, Brazil has been studying how to replace its aging fleet of fighter jets.
The Air Force declined to comment, and the defense ministry was not immediately available to comment. (Reporting by Raymond Colitt; Editing by Lisa Von Ahn)
Tue Jan 5, 2010 8:59am EST
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