Brazil To Buy Back Bonds

Brazil is to concentrate on buying back bonds, specifically Brady bonds and short-term global bonds, as part of its strategy to improve its debt profile and earn a credit ratings upgrade. So far this year it has bought $2.3 million, of which it has cancelled $773.9 million. It plans to use international reserves to fund the buyback program. Standard & Poor’s currently rates Brazil’s foreign currency sovereign debt three notches below investment grade at BB-; Moody’s rates it Ba3. A proposed move to end tax on securities trading by foreign investors (see below) may also improve Brazil’s debt profile if it boosts investors’ holdings of domestic government debt. Brazil’s current debt outstanding totals between $16 billion and $20 billion.