No Urgency for BRL Global: Brazil’s Valle

Reopening Brazil’s global BRL debt issuance is an option Brazil’s Treasury is considering, though it is not a priority, Paulo Valle, Brazil’s deputy treasury secretary, tells LatinFinance. After raising $1.75bn in new 2019 dollar debt earlier this year, Brazil re-opened the long end of the curve for LatAm issuers in July with a $500m retap of its dollar 2037s. The move has led the market to speculate the sovereign may be considering adding to its BRL-denominated positions. “It’s not something we are foreseeing, but if demand was there, we would have the ability to do it,” the official says. He explains Brazil has three BRL points, each with over $1bn, which is an ideal amount. He notes that Brazil tries to match the internal and external BRL yield curves, and that now there is more investor interest in buying BRL bonds in the domestic market than in the external one. In 2007, Brazil sold a total of BRL3.79bn in 10.25% 2028 real-dominated bonds through four different sales, according to Dealogic data. This follows BRL3bn placed in 2022s throughout the second half of 2006 and a BRL1.5bn 2016 sold in 2005.