Category: Brazil

Brazilian property developer and construction company Gafisa will offer R112.3 million of debentures. The non-convertible debentures carry a five-year maturity and are due 1 December 2010. They will yield the CDI overnight rate plus 2% annually.

Brazilian company Suzano Petroquimica has been given approval by local securities regulator to issue up to R800 million ($342 million) of long-term bonds. The company has not given and details regarding timing, size and maturity but needs to issue within the next two years. The money raised will be used for expansion.

Brazil’s finance minister, Antonio Palocci, has said he believes the country will experience strong growth next year of around 5%. However, economists are predicting average growth of about 3.5% and see Palocci’s forecast as too optimistic. Slowing inflation has recently allowed the central bank to cut Brazil’s high interest rates from 19.75% in September to its current rate of 18%. Further cuts are expected to stimulate growth. Meantime, increased government spending pushed the budget deficit up to $4 billion, its highest level in almost a year. Economists believe this will make it harder for Brazil to lower borrowing costs and reduce its debt in the medium to long term. And many are certain that spending will increase into next year ahead of elections in October.

Brazil and Venezuela will meet next February in Boa Vista in Brazil to discuss joint mineral exploration on the border zone between the two countries. The area to be explored, which stretches 2,000 kilometers between Cucui in Amazonas to Monte Roraima, is known to be rich in gold in diamonds.

Anglo-Dutch oil company Shell has sold off several of its South American retail outlets. In Uruguay, Paraguay and Colombia its 261 outlets were bought by Brazilian state-owned Petrobras in a deal worth $140 million. In Ecuador, where is has a 7% market share, it sold to Peruvian-owned Primax, in an alliance with Chilean state-owned oil company Enap, for an undisclosed sum.

Bradesco, Brazil’s largest private bank, in terms of assets, beat off Banco GE Capital SA to buy state-owned Banco do Estado do Ceará at auction for 700 million reais ($304 million), well above the minimum set of 543 million reais. Bradesco will use the purchase of the 70-branch bank to expand in the north-eastern region of Brazil.

Following the news that it plans to settle its debt with the IMF two years ahead of schedule, Brazil has said it also plans to pay back early loans of around $2.6 billion to the Paris Club creditors. The debt is due to be settled in 2006 and 2007.

Brazil’s current account surplus widened to a record level in November, driven by increased exports. The surplus reached $1.74 billion compared with a deficit of $222 million in the same month last year. The surplus in October was $911 million. FDI year on year was down slightly, recording $1.18 billion compared with $1.32 billion in November 2004. The government expects the year to end with a record surplus of $14.5 billion.