On 29 July 2016, the Luxembourg Stock Exchange (LuxSE) listed and admitted to trading a sovereign bond issue from the Federal Republic of Brazil, the Brazilian government’s second listing on LuxSE this year.
The 30-year bond (US105756BY51) has been listed on LuxSE’s “Euro MTF” market and is valued at USD 1.5 billion.
The bonds have an interest rate of 5.625%. Brazil’s government will pay coupons on 21 February and 21 August of each year, starting from 21 February 2017 until the bonds mature on 21 February 2047.
Global coordinators and joint bookrunners for Brazil’s issue were Deutsche Bank Securities, Goldman Sachs & Co. and HSBC.
Emerging market sovereign bonds have become a popular choice for investors in search of yield, particulary due to the current low interest rate environment globally. Brazil raised USD 1.5 billion when it launched a 10-year bond on 18 March 2016, after receiving USD 5 billion in orders.
Take up for the latest issue proved equally successful, having been four times oversubscribed on the primary market. The Brazilian government intends to use the net cash proceeds from the offering for general budgetary purpose, including the refinancing of domestic and external indebtedness.
Brazil’s latest listing - the 110th sovereign bond issue on LuxSE in 2016 and the 35th Latin American offering this year - cements LuxSE’s position as a leading exchange for sovereign bond listings.
Argentina, Colombia, Chile, Uruguay and Mexico are just some of the other Latin American countries that have listed with LuxSE this year. Brazil’s latest listing takes the total value of sovereign bonds listed on LuxSE so far this year to just under USD 90 billion.
