BNDES Cool on Bond Issue

Brazil’s development bank is in no hurry to tap the cross border or domestic bond markets, says Luciano Coutinho, president of the BNDES. Speaking at World Economic Forum meetings in Rio, the official says that while many bankers have asked the BNDES when it wants to tap, today’s spreads in the international market are not compelling for a new issue. Asked if he would consider a local debentures tap, Coutinho says Brazil’s interest rates are coming down and there will be plenty of time to issue at more attractive levels. BNDES is meanwhile in talks with several companies to help them work through debt and financing issues. “There are less than 20 cases where we are working together [with companies],” says Coutinho. “I think we can find a solution for almost all these cases,” he adds. Coutinho says some of the companies are very small. The goal, he adds, is to try and stem rising aversion to lending and rolling over lines by private sector banks. BNDES wants to prop up weaker credits and boost their ability to borrow again from private lenders. International bankers say they want to see the same commitment from Mexico, which has been dragged down by ongoing trouble at fallen angel Cemex.