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.