Category: Brazil

Brazil’s foreign trade surplus reached $36.35 billion as at end-October, surpassing last year’s record total of $33.70 billion. The total surplus for 2005 has now been projected to reach $38 billion.

Brazil’s debt as a percentage of GDP fell to 51.4% in September, down from 51.8% in August. The debt to GDP ratio is seen as an indicator of Brazil’s ability to pay its debt obligations. The strengthening local currency has allowed the country to reduce its foreign currency-denominated liabilities. The real has gained 17% so far this year.

Brazilian iron ore producer Companhia Vale do Rio Doce (CVRD) has sold $300 million of 30-year notes due in 2034. The notes were priced with a yield to maturity of 7.65% per year. The issue was twice oversubscribed. The offering is part of a series of notes that were issued in January 2004.

Spanish electricity group Endesa says it will invest $4 billion in Latin America. Endesa has interests in Chile, Argentina, Brazil, Peru and Colombia. A large part of the money invested will go towards expanding power plants in Chile.

Brazil’s IBGE statistics institute cut its forecast for the 2005 grain harvest by 5.4%. It said grain production this year will likely fall to 112.9 million tons. Brazil is the world’s second-largest soybean producer, but the IBGE expects soy production to drop 3.17% this year.

Brazil’s Central Bank cut its benchmark interest rate for a second straight month. The Bank’s monetary policy committee cut the Selic rate by 50 basis points to 19%. Inflation is slowing and the economy continues to grow at a moderate, but sustainable rate of 3.4%. But exporters complain that high interest rates have driven the currency up 40% against the dollar since mid-2004.

Estimates of Brazil’s growth this year have been revised upwards yet again by analysts. The latest average figure forecasts growth of 3.31, just above the 3.3 predicted last week. Buoyant exports are driving the new estimates.

Moody’s Investors Service has raised the foreign currency bond ratings of Brazilian state-owned oil producer Petrobras from Ba1 to Baa2. Moody’s said the rating actions were prompted by its previous upgrade of Brazil’s long-term foreign currency ceiling for bonds and notes to Ba3 from B1. The A2 global local currency rating, Aaa.br national scale rating and Not Prime short-term foreign currency rating of Petrobras were not affected by these rating actions.

Brazilian iron-ore producer Companhia Vale do Rio Doce (CVRD) has said it will not raise its offer for Canadian nickel-producer Canico but remains interested in buying the firm. CVRD last month offered C$17.50 per share for Canico but the Vancouver-based company has advised its shareholders to reject the offer, saying the bid is too low.

Ratings agency Moody’s Investors Service has upgraded its foreign currency credit rating for Brazil from B1 to Ba3 with a positive outlook. The upgrade was carried out to ‘reflect Brazil’s improved credit vulnerability’, said the agency. The rating is three points below investment grade. Moody’s also raised the long-term foreign currency bank deposit ratings for several Brazilian banks – from B2 to B1.