Brazil in euro issue despite downgrade

摘要

Brazil pulled the trigger on Thursday on a new €lbn seven-year euro-denominated bond, amassing a four-times covered order book as investors appeared to shrug off concerns about the sovereign's one-notch downgrade earlier in the week by S&P. Although it wrapped up roadshows for the trade last month, Brazil held fire until just days after its demotion to BBB- from BBB, and reaped the rewards for its decision. "The demand we're now seeing for Brazilian debt confirms that this was a case of: Sell the rumour, buy the stable outlook," said Robert Abad, emerging markets portfolio manager for WAMCO. "With that dynamic in play, Brazil has every reason to go on a capital markets offensive across the US or Europe or elsewhere. Investors in European markets need yield just like everyone else. Given the clearer runway for Brazilian asset performance post-downgrade, any placement in Europe should find a welcome home."