Sovereign Report

May 1, 2002

Brazil Pays Up
International investors responded tepidly at first to Brazil's latest $1 billion eight-year global bond in April, led by bookrunners JP Morgan Securities and Morgan Stanley. Brazilian authorities have said they want to issue up to $5 billion in bonds this year to cover the government's budget deficit and need to place as much as possible ahead of the October presidential elections. Brazil has issued four international bonds this year at steadily rising yields. It started with a $1.25 billion, 10-year issue that carried an 11% coupon led by JP Morgan and Citigroup in January. Then came a $1.25 billion six-year global bond with an 11.5% coupon led by Goldman Sachs and Merrill Lynch in March, followed by a ?500 million seven-year international issue with an 11.5% coupon led by Dresdner Bank and ABN AMRO. The latest issue, which carried a 12% coupon, had an issue price of...

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“The crisis has been a setback for reserve diversification."

Jan Dehn, Ashmore Investment Management