BNDES Looks to Euros

BNDES is considering a euro-denominated bond, according to DCM bankers familiar with the issuer, as more of the region’s borrowers gravitate towards that market. The development bank owned by the Brazilian government raised $1bn in January through a 5.5% of 2020 via Barclays and HSBC. This year, 3 corporate Latin issuers, including 2 Brazilians have tapped the euro market, which can offer attractive rates and diversification, though investors say liquidity is still focused on the dollar market. Miner Vale sold EUR750m in 4.375% of 2018s to yield 4.441% in March, and conglomerate Votorantim placed EUR750m in 5.25% of 2017s to yield 5.319% in April. In June, Mexico’s America Movil placed EUR1.75bn in 3.75% of 2012 and 4.75% of 2022 bonds, yielding 3.87% and 4.873%, respectively. The price sensitive issuer claimed to have paid only a 5bp new issue premium, though bankers say fluctuations in rates versus dollars need to be monitored closely. Meanwhile, frequent sovereign issuer Mexico last month placed its first euro-denominated bond since 2005 with a view to establishing a more recurrent presence. And Brazilian corporate Braskem is also considering issuing debt to European investors for the first time.