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%.


Thursday's interest rate range for the LTNs maturing in October was lower than the range of 9.78% to 12.29% paid at a similar auction on Jan. 21, while the 2012 maturity was at the same level paid at a similar auction on Feb. 11.

Traders said demand rose for the October 2010 maturity as there are growing expectations the central bank will start raising its Selic base rate later this year.

Some investors believe the hike could come as early as April.

The Selic rate currently stands at 8.75%. Brazil's interest rates are set to rise in order to counter inflationary pressure as the country's economic recovery gains further momentum. Investors expect Brazil's economy will grow around 5% in 2010.

LTNs are fixed rate, zero-coupon bonds.

The government also sold BRL1.5 billion in NTN-F bonds.

NTN-Fs are coupon-bearing, fixed-rate bonds.

The NTN-F bonds were sold at two maturities: in 2014 and 2021 and showed rates edging upwards.

The government Thursday sold the NTN-F bonds at interest rates ranging from 12.42% to 13.39%, rates at a similar auction of NTN-F bonds on Feb. 11 ranged from 12.33% to 13.23%.

Treasury sold all BRL750 million in LFT bonds dated 2013 and 2015. The Treasury sold 447.7 million LFTs with the 2013 maturity at par and the other 302.3 million for 2015 also at par with the current Selic rate.

LFT bond rates rise and fall with the Selic.

-By John Kolodziejski, Dow Jones Newswires; 5521-2586-6086; john.kolodziejski@dowjones.com"