Brazil’s recent foray into local-currency international bond offerings was a misjudgment by all concerned. Emerging-market countries should certainly take full advantage of their new-found ability to issue debt abroad in their domestic currencies. But in some cases, just because you can do so doesn’t mean you should.
Brazil is one such country. It issued a R3.4 billion ($1.5 billion) 10-year Eurobond in September, yielding 12.5%. Despite a huge amount of hype, the issue performed badly in the aftermarket: investors that bought in at launch were soon hurting, and Brazil did nothing to bolster its spotty reputation in the primary debt capital markets.
Access intelligence that drives action
To unlock this research, enter your email to log in or enquire about access
