The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Liability Management: Brazil closes Brady bond chapter

Sovereign also issues first global deal denominated in local currency.

It's the end of an era in Brazil. On October 17, the sovereign will mop up the last 20% of its outstanding C bonds, exercising its option to call them at par. The move will mean that Brazil's status as a Brady bond debtor will officially be over. Brady bonds – restructured sovereign loans backed by US treasury bills – were created to help overcome the Latin American debt crisis of the 1980s. Many sovereigns are now keen to retire this debt.

Brazil began the process in July when it pulled off one of the largest and cleanest pieces of liability management the world of sovereign finance has ever seen. In a $4.3 billion deal, the country retired some 80% of its outstanding benchmark C bonds, replacing them overnight with a brand-new benchmark: the A bond.

Most of the cost of the October exercise, some $1.2 billion, will be covered by the proceeds of a $1 billion 20-year bond issue, which came to market via Morgan Stanley and Bear Stearns in September.

Brazil is also busy issuing other types of debt instruments. On September 19, the sovereign issued a new global bond denominated in reals.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree