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July 2006

Brazil: Tender offer failure equals good news

by Felix Salmon

Investors might be keen to get out of Latin American assets right now, but that doesn’t mean they’ve fallen completely out of love with Brazilian debt. The Brazilian government tried to take advantage of the turbulent markets by announcing a $4 billion tender offer in June; the offer was a spectacular failure, attracting just $1.2 billion in bids.


“The overwhelming message we got was that we like Brazilian debt very much, and we’re not willing to part with it for cash,” says co-lead manager Credit Suisse’s Brazil head José Olympio. “Although the government would have liked to buy more debt, it was a pleasing message.”


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