Brazil’s sovereign debt sales looking at a bumper year in 2012

Rogerio Jelmayer – The Wall Street Journal/Dow Jones Newswire, 09/10/2012

The Brazilian government is looking to tap international debt market again this year, in a bumper year for issuance, as the treasury sells bonds at the lowest yield ever secured by a Latin American sovereign.

“The focus this year is concentrated in U.S. dollar bond issues and in Brazilian real denominated issue and it will remain for the rest of this year,” a senior government official said Monday, on condition of anonymity. “Brazil may tap international debt markets again this year.”

The Brazilian government is in a comfortable position, as the budget deficit is well-funded, the country has plenty of foreign exchange reserves and its improving investment-grade crediworthiness makes it an attractive destination for many investors.

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Moody’s cuts Brazil bank ratings as part of global review

Matthew Cowley – The Wall Street Journal, 06/27/2012

SAO PAULO–Moody’s Investors Service on Wednesday said it downgraded credit ratings of eight Brazilian financial institutions by one to three notches, as part of its global review of all banks with ratings higher than their home country’s sovereign rating.

“Our review indicated that there are little, if any, reasons to believe that these banks would be insulated from a government debt crisis,” Moody’s said in a press release. “More particularly, we note their significant direct exposure to the Brazilian government securities, equivalent to 167% of tier 1 capital on average.”

Moody’s downgraded the following banks to the level of Brazil’s sovereign credit rating: Banco do Brasil SA (BBAS3.BR, BDORY), Banco Safra SA, Banco Santander (Brasil) SA (SANB3.BR, BSBR) and HSBC Bank Brasil–Banco Multiplo SA.

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