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. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Brazil: Tender offer failure equals good news

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.”

Carlos Kawall, Brazil’s treasury secretary, told journalists: “We’ve identified that demand was less than expected. The fact that demand was weak, especially in shorter papers, indicates that investors are happy to keep our paper even at a time of greater volatility.”

Analysts reckon that many investors are betting on Brazil’s credit risk continuing to improve. Why tender the bonds, which will be redeemed in two or three years anyway and are paying out a 10% coupon? Indeed, far from selling their Brazilian sovereign debt, investors are to some degree moving into it, as a safer alternative to many of the corporate bonds that have been coming to market over the past couple of years. It might not be the best news from the Brazilian liability-management point of view but it does bode well for Brazilian debt over the medium to long term.

The offer involved 20 different bonds mostly concentrated at the short end of the curve although also some longer-dated notes.

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.


Unlimited access to and

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


Unlimited access to and, 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


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