The thrill of investing in Latin America just isn’t what it used to be.
Brazil has shown the world, once again, that it really doesn’t deserve to be called a ‘high-risk’ market. The country’s Treasury announced on Friday that it had sold $1bn of 30-year bonds after reopening a bond first sold in 2009.
Earlier this year, the government said it planned to issue bonds to investors abroad as a way of showcasing the country’s resilience during the global crisis.
And what a way to do it. Greece’s government is in turmoil and European banking stocks have taken another big hit, but that didn’t put them off.
In fact, Brazil had only planned to sell $500m in bonds but demand was so strong they doubled the offer. And just to stick the boot in, the government said it may well sell another $100m in Asia.
Brazil sold the debt at 114.70 cents on the dollar to yield 4.694 per cent, 160 basis points above 30-year US Treasuries.
But with less risk, inevitably comes less reward. If you miss the good old hairy days of Brazil, perhaps its time to consider Italian 30-year bonds; now yielding a nice 7 per cent.
Source: Financial Times