Brazil Bond Market to Get Impeachment Boost as Yields Tumble

  • Overseas debt sales have rebounded from a 7-year low in 2015
  • Temer became president after Rousseff was ousted Wednesday

Daly: Markets Believe in New Brazilian Administration

The impeachment of Dilma Rousseff is poised to bolster international bond sales by Brazilian companies.

They’ve already issued $14.5 billion of notes this year as borrowing costs tumbled to a one-year low in the run-up to the Wednesday vote to oust the president. That’s almost double the total for 2015.

Companies probably will ratchet up overseas debt sales in the next two months, said Philip Searson, the head of international-debt capital markets at Sao Paulo-based Banco Bradesco BBI SA. The impeachment paved the way for Michel Temer to become president and step up efforts to pull Latin America’s biggest economy out of recession.

“The market is really constructive now,” he said. “Investors seem to be open to buy any sort of notes in Brazil. The pipeline is very robust and is increasing. We are seeing several issuers preparing to tap the markets in the September and October window.” Searson declined to name the companies or forecast how much the debt they’ll issue.

Iron-ore producer Vale SA was the last Brazilian business to borrow abroad when it raised $1 billion in a bond sale Aug 3.

Brazil’s real gained 0.6 percent to 3.2377 per dollar as of 11:11 a.m. in Sao Paulo.

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