Brazil Teases Out Bradys
A $1.33 billion debt exchange retired Brazil's expensive Brady bonds. But the deal miffed some investors who thought they would be able to cash in their benchmark C-bonds.
Brazil executed a $1.33 billion debt exchange in July, its
first in two years, achieving some of its highest-ever
participation rates from holders of its Brady bonds and
releasing $650 million in collateral. While the Brazilians
hailed the deal as a success, some investors were unhappy
with the way it was structured, and complained they had
been led to expect a more ambitious transaction, perhaps
involving the withdrawal of a big chunk of Brazil's
benchmark C-bond. But the Brazilians refused to pay the
premiums bondholders were expecting. Beny Parnes, the
central bank's international director, says bluntly, "We
represent the interests of the Republic and we will not forget
that. We are responsible for the liability management of the
Republic and we care about diminishing costs for the
Bankers focused on the deal's positive aspects. Cheikh
Kane, a vice...
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