Brazil Opens LF Market for Development Banks

Brazil’s central bank has allowed development lenders to sell letras financeiras (LF) in the domestic debt market, it says, in a move aimed at stimulating infrastructure investment. Development lenders, such as the BNDES and Banco do Nordeste do Brasil, will be allowed to offer long-term senior and subordinated debt in the same way as the country’s commercial lenders currently do. “The goal of this is to broaden the use of LFs as a fund-raising instrument for the long run and pave the way for the development of a secondary market for them. The changes will permit development banks to keep helping projects in the regions where they operate,” the central bank’s Conselho Monetario Nacional says.