BNDES eyes smaller infrastructure funding role as debentures pick up
Some 10 billion reais in project bonds are in the pipeline for 2014, says Luciano Coutinho
Brazilian infrastructure projects will increasingly be
funded through bond issues as BNDES, the country’s
development bank, reduces financing in the area, the head of
the state-owned lender has said.
BNDES projects that it will finance around 23% of
Brazil’s industry and infrastructure by 2015, down
from 35% in 2011. Corporate bonds and infrastructure debentures
will pick up much of the slack financing a quarter of the
sector by 2015, up from 17% in 2011, the bank expects.
"The BNDES share will shrink," Luciano Coutinho told
investors in New York on Tuesday. "The total amount may be
expanding slowly, because the whole pie is growing, but we wish
to moderate our expansion. We wish to do it in an orderly and
coordinated way with the market, so not to harm the investment
cycle. Brazil was able to develop a very strong and liquid
market for shares, there is no reason why we should not and
cannot develop a strong market for bonds and fixed income,
particularly related to infrastructure."
Brazilian companies are preparing to sell around 10 billion
reais of infrastructure debentures in 2014, Coutinho said.
"We’re committed to helping the process on the
emission of bonds. These are concrete initiatives. BNDES will
be engaged and we will be in a close dialogue with the market.
So far, we have succeeded in the emission of 4.5 billion reais
in infrastructure bonds.
"Looking to the future, in our consultations we already see
that around nine to 10 billion reais of bonds to be emitted in
2014 and we hope that these will increase. We’ll
be working hard in this direction."