After several years in the
doldrums, Brazil's economy is likely to grow by 3%-4% this year
and bankers expect a sharp increase demand for loans. Bradesco,
Brazil's largest private-sector bank, expects the country's GDP
to grow 3.5% in 2004 but forecasts demand for loans will grow
much faster, by about 20%. Bradesco, like most other large
Brazilian banks, issued debt on the international markets all
last year to boost its lending capacity. Indeed, 2003 was the
bank's busiest in the international bond markets ever, issuing
$825 million-worth of bonds, nearly three times more than in
A large portion of that issuance comprised a single, $500
million subordinated debt issue, the largest of its kind ever
launched by a Latin American bank. Subordinated debt counts as
tier two capital, which enables banks to raise lending without
endangering their capital ratios. Subordinated debt is also
popular because it...
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