Roundup: BB 750mn-euro issue, Safra, Votorantim, Febraban, BCSul

Friday, January 14, 2011

The issue of 750mn euros (US$1bn) in five-year bonds with a yield of 4.625% by federally controlled Brazilian bank Banco do Brasil (BB) bodes well for the bank and its funding base, analyst Luciana Leocadio of brokerage Ativa said in a research note.

Pointing to the low yield and increased diversification of funding, Leocadio said that the bonds would be used for trade finance and working capital loans for both Brazilian and European companies.


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Moody's gave a Baa2 foreign currency debt rating to the proposed US$500mn in 10-year subordinated notes to be issued by Brazil's Banco Safra via its Grand Cayman branch.

The notes, due in January 2021, will be eligible for Tier 2 equity upon regulatory approval. The rating outlook is stable, the statement from Moody's said.

To read the full statement on Safra from Moody's, go to this link


This year could continue to show a fall in corporate interest rates and increase in tenors, as secondary market liquidity and diversification of products, issuers and investors help improve Brazil's credit conditions, along with the vast push of government measures on this front, Votorantim Asset Management said in a new report.

Votorantim noted the effect of central bank BCB's decision to open up letras financeiras, a new funding instrument for banks, early in 2010, as well as several tax incentives toward longer-term bond funding for corporate clients.


Brazilian banking federation Febraban may see the IMF's deputy managing director, Murilo Portugal, take over for Santander Brasil's (NYSE: BSBR) Fabio Barbosa as the federation's head, according to local daily O Estado de S Paulo.

If Portugal, who has been with the IMF since 2006 and previously held roles in the last two governments before that of President Dilma Rousseff, takes the job in March, it would be the first time since Febraban's founding in 1967 that the group was led by a person not connected to a large Brazilian bank.

Barbosa was set to see his term end last year, but decided to stay on for an extra year.


Brazilian midsize bank Banco Cruzeiro do Sul (BCSul) sold US$400mn in five-year bonds with a yield of 8.375%, according to international media.