Brazilian ICT industry surpasses US$2bn in incentivized debenture issues

Brazil's IT and telecom sector has issued over 11.9bn reais (US$2.16bn) in incentivized debentures since it was allowed to use the debt instrument, data from capital market regulator Anbima shows.

The amount represents 4% of all debentures issued in the country and is largely concentrated on operations carried out by carriers and internet service providers.

Debentures are special infrastructure bonds that have become popular among investors because they come with tax breaks.

Financing via such bonds has been commonplace for years in the logistics, energy and sanitation sectors, and a regulation in 2020 authorized telecom operators to use the instrument too.

The sector that leads this type of financing is electric power, with 44%, or 143bn reais of the total issued to date in the country. It is followed by transportation and logistics (21%), sanitation (13%), oil & gas (6%), bionenergy (5%), and IT and telecommunications.

In the first half, IT and telecom firms raised over 4.5bn reais in incentivized debentures, compared to 1.1bn reais in the same period last year and 2.5 times the total of 2023.