Brazil plans to tap the international bond market more frequently this year in the wake of last November’s $2 billion sustainable bond issue, including with a similar such deal, Treasury Secretary Rogério Ceron told LatinFinance on Thursday.
“We intend to be more active in the international bond market this year than we have been,” he said in an interview.
“The idea is to be ready in the first half of the year” for issuing, he said.
Luiza Aguiar, an ESG researcher at XP, a Brazilian bank, said the decision to step up the pace of issuance comes thanks to the sale of the $2 billion sustainable bond, its first ever. The deal attracted a lot of international investors, she said.
ON BOTH FRONTS
This year, the issuance amount could surpass that of last year, when the country sold that first sustainable bond and another $2.25 billion in April.
Ceron said the next bond issuance will likely fall in the sustainable category. “The decision has not been taken but the tendency is to consolidate a solid benchmark for corporate issuance in sustainable bonds,” he said.
Another option is to issue traditional sovereign bonds. “This is likely,” he said. “There is a good chance we will be acting in both markets.”
Brazil’s improving economy and finances are helping it to plan this market offensive.
“Brazil has repositioned itself. There is a good environment for that,” Ceron said.
CURRENCY HEDGING
Ceron also said the government is preparing foreign exchange hedging tools to encourage foreign investment in its green transition program, a project it is working on with the Brazilian central bank and the Inter-American Development Bank.
“It will be a great novelty to attract more funding for the environmental transition in Brazil,” he said. “It may have a strong impact on the debt market and funding for Brazilian companies to support the environmental agenda. Exchange rate volatility often scares away investors.”