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Brazil wants to rebuild its image as a frequent issuer in global debt markets and could maintain the faster pace of bond sales it established last year, a top Treasury official told LatinFinance . After years of slower cross-border bond activity, Brazil came to the market with $4.5 billion worth of 10-year and 30-year bonds early in 2024, followed by a $2 billion placement of sustainable bonds last June. “Our issuances were significant last year,” Daniel Leal, the Brazilian Treasury’s new undersecretary of public debt, said in an interview. “We can issue a similar amount in 2025 and again in the following year.” Around $6 billion to $7 billion of Brazil’s foreign-currency debt will mature in 2025, which will need to be financed. Leal, who assumed his current post last month, stressed that the Treasury’s strategy is to keep foreign currency debt at between 3% and 7% of the sovereign’s total debt. It currently hovers around 4%. In November 2023, the sovereign made its long-awaited debut in the sustainable bond arena with the sale of $2 billion in green notes. Leal said that the Treasury’s goal is to make new issuances of both sustainable and traditional bonds, although he declined to indicate the timing of the next offering. “We are always monitoring the market, and we can quickly launch new deals when there is a window of opportunity,” he said. BOND YIELDS The policy pronouncements of newly installed US President Donald Trump could determine how quickly the windows of opportunity open and close. Long-term US government bond yields have climbed this month as investors price in stronger economic growth and faster inflation as a result of Trump’s protectionist economic policy stance. The only Latin American sovereigns to raise funds in the international market this month are Mexico and Chile. Leal expressed optimism that new Brazilian issuance would be well received by global markets, despite the slump in bonds and stocks late last year amid concern about the country’s large budget deficit. “International investors have a longer term view and a stronger stomach to bear the domestic market’s mood swings,” he said. “They know that all emerging markets have fiscal problems, and that Brazil is not among the worst of them.” A positive feeling in the domestic market is also an important condition for a successful sovereign issuance, he added. Leal did not rule out the possibility of another credit rating upgrade at some point in the near future, after Moody’s raised its rating for Brazil’s debt last October. Leal spent a decade working in the public debt department before joining BCG Liquidez in São Paulo as a fixed income strategist in September 2023. He assumed his current post late last month.
