Category: Brazil

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.

Brazilian group Camargo Correa says it plans to invest around $100 million over the next three years in Argentina. This follows the approval on Tuesday by the Argentinian government of the purchase by Camargo Correa of the country’s largest cement producer, Loma Negra, which has a 48% share of the local market.

The board of Canadian nickel-producer Canico has urged shareholders to reject the recent offer made by Brazil’s iron ore company Companhia Vale do Rio Doce (CVRD). Last month CVRD make an unsolicited bid for the Canadian company, offering C$17.50 per share. Canico says the offer is too low.

Brazilian-based iron ore producer Companhia Vale do Rio Doce (CVRD) has been given a local- and foreign-currency corporate credit rating of BBB with a stable outlook by ratings agency Standard & Poor’s. The rating above the sovereign rating given to Brazil (currently BB-/BB).

Brazilian São Paulo-owned savings bank Nossa Caixa will be allowed to sell shares to foreign investors following a decision by President Luiz Inácio Lula da Silva. The state of São Paulo has been authorized to sell up to 49% of the bank’s capital which will bring in an estimated $700 million. However, it is thought that only 25% will be offered initially.

Brazilian holding company Vicunha Siderúrgica Brasil has launched perpetual bonds in the international markets with an initial target of $475 million, which may rise to $500 million depending on investor demand. The yield on the bonds is not known. The bonds, which offer no definite due date, cannot be redeemed for at least five years. The issue was arranged by CSFB and Deutsche Bank.