Brazil to become regular borrower in China, treasury official says
Brazil intends to sell yuan bonds in China every year rather than once, a senior Brazilian treasury official said on Wednesday, in a plan that would make the Chinese currency a permanent fixture of its external debt. The debut is expected before the end of the year and is small enough that the government is not relying on the proceeds, with external debt at four per cent of the federal stock.…
Brazil plans to issue yuan bonds in China annually, a move that will make the Chinese currency a permanent part of the country's external debt, according to a senior Brazilian treasury official. The debut is expected before the end of the year, though the amount raised remains uncertain. Francisco Segundo, deputy secretary for public debt at the National Treasury, emphasized that the primary goal is to unlock new investors and create a sovereign curve for Brazilian companies to reference internationally.
Panda bonds, sold inside China by foreign issuers to Chinese investors, were previously limited to foreigners. However, regulations changed in December 2022, allowing foreign issuers to price their bonds in yuan. Brazil is the first Latin American sovereign to enter this market, following Kazakhstan, Pakistan, Slovenia, and Indonesia.
The treasury aims to be active in the market, seeking success and potential in each transaction. This plan is inspired by Europe, where Brazil initially sold euro debt in 2014 and later returned with a five billion euro offering. The return of the sovereign curve is expected to benefit Brazilian companies by establishing liquid benchmarks and creating a reference for pricing.
Written by urgent.news from South China Morning Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
