2 days ago
Brazil sells $2.75 billion in second dollar bond deal of 2025 as CDS hits year low
BRASILIA, June 4 (Reuters) - Brazil sold $2.75 billion in dollar-denominated sovereign bonds on Wednesday, the treasury said, marking its second international issuance this year as the country capitalizes on declining default risk.
The government sold $1.5 billion through a new five-year bond maturing in 2030, with a yield of 5.68%, and an additional $1.25 billion through a reopening of its 10-year benchmark Global 2035 bond, with a 6.73% yield.
The deal comes amid a recent decline in Brazil's five-year credit default swap (CDS) , a key gauge of sovereign risk used by investors to hedge against default.
After rising earlier this year, Brazil's CDS has retreated to its lowest level of 2025, down 27.6% year-to-date as of Tuesday.
Brazil's dollar bond sale follows the $2.5 billion 10-year sovereign bond placed in February, which was the issuance reopened on Wednesday.
The treasury said in a statement that the demand for the new issuance surpassed the issued volume by about four times.
Reuters had reported earlier in the day, citing a source, that Brazil was poised to sell $2.75 billion with the bond sale.
Emerging markets have broadly benefited from a global rotation of capital driven in part by trade policy shifts, including steep tariff hikes introduced by U.S. President Donald Trump - a trend that has contributed to the weakening of the U.S. dollar globally.
On the domestic front, investors are in a wait-and-see mode ahead of structural fiscal measures the government signaled are being negotiated with Congress, after a controversial hike in taxes on some financial transactions aimed at boosting public revenues was poorly received.
The new external issuance aims to boost liquidity in Brazil's sovereign dollar yield curve, provide pricing references for corporate issuers and raise funds to pre-finance upcoming external debt maturities, the treasury said.
BNP Paribas, Citigroup and Santander led the transaction.
