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Brazil capital markets supply more infra financing

Bnamericas
Brazil capital markets supply more infra financing

Brazilian bonds known as debentures for financing infrastructure projects are gaining ground, reaching the same level as loans provided by development bank BNDES.

In the first half of this year, a total of 10.9bn reais (US$2.83bn) of debentures for infrastructure projects were issued, compared with 11bn reais in loans provided by BNDES in the same period.

Last year BNDES infrastructure loans totaled 26.8bn reais, while the volume of infrastructure debentures reached 9.1bn reais, according to financial newspaper Valor Econômico.

The administration of President Michel Temer changed the approach of state-run banks, including BNDES, reducing their roles in various sectors due to fiscal challenges and in an attempt to open up space for the private sector.

Meanwhile, as country's benchmark Selic interest rate is currently at 6.5% per year, the lowest level ever, investors seek projects with higher returns.

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