Brazil Is Unwilling to Pay Higher Yield Than Its Last Overseas Bond Sale

Brazil is unwilling to sell bonds on the international market at a yield that is higher than what it paid in its last debt sale, Treasury Secretary Arno Augustin said.

The Treasury last tapped the international market in October, when it sold 1.1 billion reais ($684 million) of bonds maturing in 2028 to yield 8.85 percent. The yield rose 3 basis points to 9.15 percent at 9:31 a.m. New York time.

“It is very unlikely,” Augustin said in an interview late yesterday in Brasilia when asked whether the Treasury could issue foreign bonds with a higher yield.

Augustin said in a Jan. 21 interview that the government plans to sell real-denominated securities as part of an effort to stem a 44 percent rally in the currency since the beginning of 2009. He said the government would either re-open its existing real bonds, or sell new debt overseas maturing in 10 and 30 years. The government also included the outstanding real notes in its buyback program to improve liquidity, according to the 2011 financing plan.

To contact the reporters on this story: Arnaldo Galvao in Brasilia at agalvao1@bloomberg.net; Andre Soliani in Brasilia at asoliani@bloomberg.net

To contact the editor responsible for this story: Joshua Goodman at jgoodman19@bloomberg.net

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