Brazil’s Petrobras unveils details of debentures issue

Rogerio Jelmayer – The Wall Street Journal, 5/27/2015

Brazilian state-run oil company Petroleo Brasileiro SA, or Petrobras, unveiled details of its debentures issue on the local debt market, which could total up to 4.05 billion reais ($1.28 billion).

The company will issue the debentures in five series, with different maturity dates of five-, seven- and 10 years. The company will sell a total of 3 billion reais in debentures and it can increase the offer by 1.05 billion reais to accommodate potential strong demand from investors.

The company said that the debentures of the first and second series will pay an annual yield of up to 2.15 percentage points over the interbank rate, called DI, which is 11.4% a year.

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Brazil’s Petrobras unveils details of debentures issue

Brazil’s senate clears second austerity bill

Paulo Trevisani & Djania Savoldi – The Wall Street Journal, 5/27/2015

The Brazilian Senate on Wednesday approved a controversial bill meant to save taxpayer money by reducing pension payments to widows.

The measure is part of a broader effort to reduce the government’s high debt levels, which are threatening the country’s investment-grade rating.

The vote is a victory for President Dilma Rousseff and comes less than a day after Congress cleared another bill that reduces unemployment benefits. Together, the bills will save some 15 billion Brazilian reais ($4.8 billion) in taxpayer money, government officials say.

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Brazil’s senate clears second austerity bill

If you think Brazil’s first quarter was bad, wait for the second

David Biller – Bloomberg Business, 05/27/2015

Brazil’s economy probably shrank in the first three months of 2015, and the second quarter may be worse as the nation enters its first recession in six years.

Gross domestic product contracted 0.6 percent in the first quarter, according to the median estimate of 36 economists surveyed by Bloomberg. When surveyed last month, analysts forecast that would be the year’s weakest quarter. Now they foresee the second quarter being even worse, according to a May 22-27 survey.

As steward of Brazil’s economic policy, Finance Minister Joaquim Levy has cut spending while raising taxes and the prices of regulated items to avert a sovereign downgrade. At the same time, the central bank is boosting borrowing costs to slow inflation. This two-pronged tightening has already taken a toll on industry and investment, and the slump will spill over into consumption and services in the second quarter, according to Roberto Padovani, chief economist at Banco Votorantim.

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If you think Brazil’s first quarter was bad, wait for the second

Brazil’s senate clears second austerity bill

Paulo Trevisani, Djania Savoldi – The Wall Street Journal, 05/27/2015

The Brazilian Senate on Wednesday approved a controversial bill meant to save taxpayer money by reducing pension payments to widows.

The measure is part of a broader effort to reduce the government’s high debt levels, which are threatening the country’s investment-grade rating.

The vote is a victory for President Dilma Rousseff and comes less than a day after Congress cleared another bill that reduces unemployment benefits. Together, the bills will save some 15 billion Brazilian reais ($4.8 billion) in taxpayer money, government officials say.

Read more…

Brazil’s senate clears second austerity bill

Soiled by oil scandal, Brazil’s model is primed for makeover

Juan Pablo Spinetto, Anna Edgerton, Sabrina Valle – Bloomberg Business, 05/27/2015

Oil was to be the elixir of Brazil’s dreams to build a formidable economy, promote industrial development and fund a more generous welfare state even as it attracted billions in private global investment.

Instead, crisis and disappointment in the oil sector are beckoning Brazil’s leadership to move — if grudgingly — toward more deregulated industries and to temper the government’s hand in using state-run companies to forge broader economic policy.

Which helps explain why, as her second term takes shape, some of President Dilma Rousseff’s ministers have jettisoned the statist language of her first four years in office and those of her popular predecessor, Luiz Inacio Lula da Silva. Instead, they are floating some liberal notions more in keeping with the pre-Lula years.

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Soiled by oil scandal, Brazil’s model is primed for makeover

China to invest $50b in Brazil infrastructure

BBC, 05/15/2015

China is planning to invest up to $50bn (£32bn) in Brazil for new infrastructure projects.

The deal is due to be signed by banks from both countries during a visit by Chinese Prime Minister Li Keqiang to Brazil next week.

The money will go towards building a railway link from Brazil’s Atlantic coast to the Pacific coast of Peru to reduce the cost of exports to China.

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China to invest $50b in Brazil infrastructure

Brazil’s faltering economy needs some tough love

Samantha Pearson – Financial Times, 5/12/2015

For Brazil’s economists, 2015 will certainly be a year to forget. Latin America’s biggest economy is expected to contract by more than 1 per cent this year, marking the country’s worst recession in 25 years.

Meanwhile, inflation is set to end the year above 8 per cent, breaking the target range for the first time since 2003.

To add to the country’s woes, the corruption scandal at state-controlled oil company Petrobras — believed to be the biggest of its kind in Brazilian history — has the potential to slow growth further and accelerate job losses.

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Brazil’s faltering economy needs some tough love