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Brazil prices USD3.2bn 12-year benchmark bond at T+180bp
October 23, 2013 / 10:29 PM / in 4 years

Brazil prices USD3.2bn 12-year benchmark bond at T+180bp

Oct 23 (IFR) - Brazil on Wednesday raised some US$3.2 billion with a new 12-year benchmark bond that priced at Treasuries plus 180 basis points (bp).

The sovereign, rated Baa2/BBB/BBB by Moody‘s, S&P and Fitch, combined the new issue with a one-day liability management operation designed to mop up some outstanding off-the-run bonds.

The new issue priced with a coupon of 4.25% to yield 4.305%. Brazil announced the transaction earlier in the day with initial price thoughts of Treasuries plus 200bp area.

It then squeezed guidance to 180bp-185bp before launching at the tight end of that range.

“Everything has gone that way,” said a syndicate official. “You start wide and you jam it in.”

The final order book size on the trade was about US$7bn.

Final pricing levels underscored just how much the cost of funding has risen since Brazil came in September with its last US$1.35bn 10-year benchmark, which carried a 2.625% coupon, its lowest ever.

In May it tapped those bonds for another US$750m to yield 2.75% or Treasuries plus 98bp.

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