IOF Move Double-Edged for Brazilian Issuers

Jun 7, 2013

Although the markets have largely applauded Brazil’s decision to axe the IOF tax, the move presents challenges for Brazilian issuers. In particular, DCM bankers say the global-BRL trade and the prospects of selling infrastructure debentures abroad will suffer. “This kills the global-BRL market for a while,” says a Brazil focused DCM banker, as the bonds’ popularity was due to avoiding the tax. Though global-BRL bonds were successfully sold prior to the IOF’s inception, bankers note the market is very different now and many more foreigners have onshore accounts....

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