Bond Market in Brazil Gets Recovery Boost After December Rout
Money managers are tipping their toes back into Brazilian assets, cherry-picking dollar bonds of companies like Raizen and Usiminas following a deep selloff spurred by concerns over the country's spending plans.
Dollar bonds of Brazilian corporates are handing investors a 2.2% return since the beginning of the year. That's roughly double the average return for corporate bonds in emerging-markets over the same period.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
5 hours ago
- Yahoo
Exclusive-Brazilian businessman Tanure courts banks after hatching Braskem bid with Novonor
By Luciana Magalhaes SAO PAULO (Reuters) -Brazilian businessman Nelson Tanure has begun talks with the banks that will be key to his bid for petrochemical firm Braskem , he told Reuters, as he aims to clinch a deal this year and give oil giant Petrobras a larger role in operations. Braskem is Latin America's largest petrochemical firm, and its controlling shareholder Novonor has been exploring a sale for years as it looks to exit bankruptcy protection and turn the page on a vast corruption scandal. Tanure is the latest bidder trying to unlock a stalemate between Novonor, the banks holding Braskem shares as collateral and state-run Petrobras, which is an influential shareholder and key supplier of the firm. In his first public comments since revealing his Braskem bid last month, Tanure said he began courting engineering group Novonor, formerly known as Odebrecht, after the Abu Dhabi National Oil Company's offer to buy its Braskem stake collapsed over a year ago. "After Adnoc withdrew their offer, I began confidential discussions with (Novonor) in absolute secrecy," Tanure wrote in response to questions. Novonor would remain a shareholder in the proposed deal, Tanure said, with the latest proposal reducing its stake from 38.3% to around 3.5%, adding: "I would not make an agreement if they did not remain involved." Tanure said the deal is still under discussion. Novonor confirmed the talks in May, but declined to comment on details provided by Tanure. During the corruption scandal a decade ago, Novonor used its Braskem stake as collateral for some 15 billion reais ($2.7 billion) in bank loans. The shares' value has fallen with profit margins in petrochemical markets and now covers less than a quarter of that debt. Despite Tanure's progress with Novonor, its creditors view his offer with skepticism as they have their own plans for Braskem, according to two people familiar with the matter. State development bank BNDES and other major banks have proposed pooling the shares pledged as collateral into a private equity fund that would make investments to turn the company around before selling the shares, Reuters reported in November. BNDES President Aloizio Mercadante confirmed talks with Petrobras and other banks to resolve the standoff at the time. On Tuesday, the bank declined to comment on Tanure's competing proposal to Novonor. "The success of this acquisition necessarily depends on alignment with (the banks)," Tanure said, although he pushed back at the idea that the lenders effectively control Braskem. "It's important to clarify that the shares still belong to the Novonor group. They are merely pledged to banks as collateral for loans." The Rio de Janeiro-based businessman, who has a track record of investing in companies undergoing contentious restructuring, is a major shareholder in power firm Light and oil company Prio. If he can clinch the deal for Braskem, Tanure sees a larger role for Petrobras, which has a right of first refusal for Novonor's stake under their shareholder agreement. "I believe their presence in (Braskem's) operations is small and needs to be expanded," Tanure said. "We must acknowledge that Petrobras has seniority and management expertise in oil companies comparable to the best in the world." Petrobras declined to comment. Last week, Petrobras CEO Magda Chambriard said Braskem was a very important asset, but its current management was "not what we want." Asked by Reuters about Tanure's offer, she said: "We can only applaud. We want a solution." Tanure said his ambitions for Braskem include transforming its Camaçari complex in Bahia state into a hub for sustainable innovation and "green" petrochemicals with lower emissions. ($1 = 5.5626 reais) Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 hours ago
- Yahoo
Brazil's fiscal package to include higher tax on interest on equity
BRASILIA (Reuters) -Brazil's Finance Minister Fernando Haddad said on Tuesday that the government's new fiscal package includes an increase in the income tax rate levied on so-called interest on equity (JCP) payments to 20% from 15%. JCP is a form of shareholder remuneration that allows companies to deduct such payments from their corporate tax base. Speaking to reporters, Haddad said that the decision to include the measure - previously proposed by the government but not voted on by Congress - came at the request of lawmakers. Haddad also confirmed that the fiscal package includes the unification of income tax rates on financial investments at 17.5%, replacing the current sliding scale of 15% to 22.5%, which varies according to the investment's holding period. The new rate would apply to all investments, including stocks and bonds, except those currently exempt from income levy, which would begin to be taxed at 5%, as Haddad had already disclosed on Sunday. The minister, who spoke after returning from a meeting with President Luiz Inacio Lula da Silva, said the additional revenue generated by the package would be used primarily to revise the previously imposed financial operation tax (IOF) hike on forfait operations. The IOF decree, which had been introduced to boost public revenues and also raised the tax on private pension funds and some credit and foreign exchange transactions, triggered strong pushback from both Congress and market players, prompting the government to seek an alternative path as lawmakers threatened to overturn the measure. Haddad defended the new fiscal measures on Tuesday, arguing that they are likely to support the strengthening of the Brazilian currency, pave the way for interest rate cuts, and help ensure compliance with this year's and 2026 fiscal targets. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
11 hours ago
- Yahoo
UnitedHealth Group considers bids to divest Latin American unit
US health insurer UnitedHealth Group is considering multiple bids to offload its operations in Latin America, reported Reuters, citing sources. The insurer has been attempting to divest its Latin American assets since 2022, following losses exceeding $8bn in the region, the report said. The news agency further noted that the urgency to sell its subsidiary Banmedica, which operates in Colombia and Chile, has intensified in recent months due to financial pressures on multiple fronts. The company has already exited its operations in Brazil and Peru and is now focusing on securing a deal for its Colombian and Chilean operations. Currently, UnitedHealth has received four non-binding bids for Banmedica, estimated at around $1bn. The bidding entities are Acon Investments, Patria Investments, Christus Health and Auna from Lima. Auna is reportedly in discussions with a financial partner to strengthen its bid. UnitedHealth acquired Banmedica in 2018, with then-CEO David Wichmann expressing a long-term vision for growth in South America. However, the insurer decided to withdraw from the region three years later due to losses, particularly from its Brazilian operation, Amil. Despite Banmedica being profitable, with earnings before interest, taxes, depreciation and amortisation (EBITDA) of more than $200m, it is deemed too small for UnitedHealth's interests. Brazilian investment bank BTG Pactual is said to be advising UnitedHealth on the sale process. UnitedHealth expects to set a deadline for binding proposals for Banmedica by July, as it seeks to streamline its operations and focus on more profitable markets. The company bounced back to profitability in the first quarter of 2025, with net earnings of $6.4bn, compared with a net loss of $1.2bn in the same period a year ago. Stephen Hemsley took over the role of group CEO from Andrew Witty in May. "UnitedHealth Group considers bids to divest Latin American unit " was originally created and published by Life Insurance International, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
