Category: Brazil

The world’s largest iron-ore producer, Brazilian Cia. Vale do Rio Doce (CVRD), has made Brazil’s largest corporate foreign currency offering with its $1 billion bond sale. The bonds were issued to help fund a buyback of up to $300 million of its 9% 2013 bonds which will cut the company’s borrowing costs. The record international bond sale, led by JP Morgan, mature on 16 January 2016 and were sold to yield 6.254%. CVRD’s debt has an investment-grade rating.

The Brazilian government’s statistics agency forecasts a 13.2% rise in grain and oilseed production to 127.6 million tons in 2006. Brazil is the world’s second-largest soybean exporter. Soybean production should rise 15.8% to 59.2 million tons this year despite a 6.1% drop in acreage. Corn production is set to rise 27% to 34.6 million tons. Cotton could about 25% to 2.8 million tons. Brazil’s total agricultural production fell 5.2% to 112.7 million tons in 2005.

An assembly of 150 employees of bankrupt Brazilian airline Varig voted 96% in favor of a recovery plan put forward by the Ruben Berta Foundation that controls the carrier. The assembly rejected a $112 million takeover plan by Brazilian tycoon Nelson Tanure but approved the sale of Varig’s logistics and maintenance divisions to TAP of Portugal.

Brazil ‘s President Luis Inácio Lula da Silva will begin a $200 million highway repair program, which analysts say may signal his intention to run for reelection in October despite a corruption scandal that implicated top officials in the ruling Workers Party. Transportation Minister Alfredo Nascimento said the government would begin filling potholes in federal highways stretching 26,400 kilometers across the country. One-quarter of the contracts will be awarded on a no-bid basis.

Brazil’s Cia. Vale do Rio Doce, the world’s largest iron ore company, launched a tender offer to repurchase up to $300 million of outstanding debt. CVRD, which has an investment grade rating, wants to cut its borrowing costs by buying back the 9% bonds due 2013, which yielded 6.19% prior to the buyback announcement. The repurchase offer expires January 10. The company will finance the buyback by issuing fresh 10-year international bonds. It will also use the proceeds to finance ongoing operations. CVRD mandated JP Morgan to lead the deal.

Brazil’s official Conab supply company says forecasts that the country’s coffee farmers will increase output 32% to 40.4-43.6 million bags in the 20006-2007 harvest. Market forecasters expect a larger 45 million bag crop. Exporters say that although foreign shipments fell 1.5% by volume in 2005 to 26.2 million bags, revenues rose 44% to an estimated $2.9 billion as prices rose. Exports this year are forecast at 26-26.5 million bags worth about $3 billion.