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| National Treasury Raises US$ 2.5 Billion: Pexel |
High Demand and Market Confidence
The National Treasury has announced the successful issuance of US$ 2.5 billion in its first dollar-denominated bond offering in the international market in 2025. According to the agency, investor demand for these bonds far exceeded the amount offered, demonstrating strong interest in Brazilian sovereign debt.
Issuance Details
The issuance involved bonds maturing in 2035, traded at a yield of 6.75% per year. This rate represents a spread of 2.20 percentage points above the equivalent 10-year U.S. Treasury bond yield, marking the lowest spread since 2020. This suggests growing market confidence in Brazil's fiscal stability despite global economic challenges.
Government Planning and Strategy
Foreign exchange-linked bonds continue to represent a smaller portion of Brazil’s public debt, closing 2024 at 4.76% of the total stock. The majority of these issuances correspond to sovereign debt. For 2025, the National Treasury's Annual Financing Plan (PAF) projects that these bonds will account for between 3% and 7% of total debt, maintaining the same target as the previous year.
This issuance is part of a broader government initiative to expand sustainable bond offerings abroad. In May 2024, the government requested Senate approval to increase the external debt issuance limit from US$ 75 billion to US$ 125 billion. This move is part of a strategy to diversify financing sources and attract investors aligned with sustainability projects.
The positive market response to this latest issuance suggests that Brazil continues to secure external financing at competitive costs. The performance of these bonds in the coming months will be an important indicator of investor sentiment regarding the country’s fiscal and monetary policies, as well as the global macroeconomic environment.
