October 26, 2020

Government-Run Banco do Brasil Plans to Issue CHF200 Million In Bonds


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A man walks past a Banco do Brasil SA bank branch in BrasiliBy Luciana Magalhaes From Wall Street Journal

SAO PAULO–Brazil’s government-run bank Banco do Brasil (BBAS3.BR) is planning to issue a minimum of 200 million Swiss francs ($220.4 million) in bonds maturing in 2019, Fitch Ratings said in a note to the market Tuesday.

The credit rating said it expects to assigns a long-term foreign currency rating of ‘BBB’ to the proposed issuance.

The fixed-rate bond will be issued by Banco do Brasil through its Grand Cayman branch under a $5 billion medium-term notes program, with a 5.5 year of tenor, Fitch said.

The bonds proceeds will be used for general corporate purposes and its interest will be defined upon a book building process, the credit agency said.

Brazil’s federal government, its main shareholder, has influence over the bank’s strategy, which has been seen most recently in the widespread reduction of domestic interest rates, Fitch said.

The agency said the issuance rating would be affected by potential changes in the sovereign rating of Brazil, or its shareholders willingness to provide support. Fitch, however, said it doesn’t expect the government to alter its support to Banco do Brasil.

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