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%.
At a similar auction last month, the government sold NTN-B bonds at an interest rate range between 6.37% to 6.44%.
Brazil was forced to pay a higher interest rate to attract skittish investors after credit-ratings agency Standard & Poor's downgraded the sovereign debt of European Union members Greece and Portugal. Interest rates had also ticked higher in recent bond auctions on expectations that the Brazilian Central Bank would raise interest rates later this week.
The bank's Copom rate-setting panel meets Wednesday, when it's expected to increase the benchmark Selic base interest rate by as much as 75 basis points. The Selic currently stands at 8.75%, the lowest level since the reference rate's inception in 1999.
NTN-B bonds pay a rate equal to Brazil's official IPCA inflation rate plus the interest rate established at the auction. The rolling 12-month inflation rate ended mid-April at 5.22%.
The Treasury's next scheduled auction will be held Thursday, when LTN and NTN-F bonds will be sold. The volume of bonds on offer isn't released until the day before the auction.

-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; Jeff.Fick@dowjones.com
Rates Rise As Brazil Sells BRL408M Inflation-Indexed NTN-Bs - WSJ.com