{"id":90809,"date":"2024-09-02T10:57:15","date_gmt":"2024-09-02T13:57:15","guid":{"rendered":"https:\/\/murray.adv.br\/?p=90809"},"modified":"2024-09-02T10:57:17","modified_gmt":"2024-09-02T13:57:17","slug":"companies-return-to-foreign-debt-market-in-september","status":"publish","type":"post","link":"https:\/\/murray.adv.br\/en\/companies-return-to-foreign-debt-market-in-september\/","title":{"rendered":"Companies return to foreign debt market in September"},"content":{"rendered":"\n
With expected interest rates cut in the U.S., Brazilian companies should resume bond issuance<\/em><\/h6>\n\n\n\n

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09\/02\/2024 <\/p>\n\n\n\n

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Investment banks are preparing their first meetings with foreign investors to launch Brazilian companies\u2019 issuances in the international debt market. Around six deals are expected for September, according to sources interviewed by Valor, including issuances by Ra\u00edzen and banks. Subsea engineering company Oce\u00e2nica, which is new to this type of transaction and tried to launch an offer in August, is also among possible candidates.<\/p>\n\n\n\n

The market expects a busy season, starting Monday (2) after the return of vacations in the Northern Hemisphere and the Labor Day holiday in the U.S. In this scenario, some issuances may be brought forward not only to take advantage of more attractive rates but also to avoid proximity to the elections in the U.S., which could increase volatility.<\/p>\n\n\n\n

The year has already surpassed 2023 in the amount raised with offers abroad. Brazilian companies issued $16.4 billion in bonds so far this year, compared to $16.1 billion last year, according to data from Bond Radar. People familiar with the matter say the expectation is that transactions will reach around $20 billion at the year-end.<\/p>\n\n\n\n

The banks coordinating the operations have different readings of the impact of the election in the United States on the deals. Samy Podlubny, head of debt capital markets at UBS BB, says potential issuers are currently divided into two groups: those betting on September and those looking at January 2025 to avoid an issuance during the race for the White House. \u201cAlthough they know this month\u2019s window could be complicated, given the concentration of deals in a shorter time, several companies accelerated to issue before the [U.S.] elections,\u201d he said.<\/p>\n\n\n\n

Gustavo Siqueira, Morgan Stanley\u2019s country head of fixed-income capital markets, says companies should try the September window. However, he does not expect an impact from the U.S. elections on the markets. \u201cWe see a more active month but some deals could be delayed to October or November,\u201d he pointed out. According to the executive, the market is liquid and investors are seeking return, which opens up room for issuing companies. \u201cWe see a recovery after two weak years.\u201d<\/p>\n\n\n\n

From the beginning of August\u2014when a steep drop in the stock market in Japan shook global markets\u2014until now, the conditions for raising funds through bonds abroad have improved, according to Caio de Luca de Sim\u00f5es, head of debt capital markets at Bank of America in Brazil. \u201cTreasuries became more stable and net interest rate spread returned to an appropriate level, after a period of strong volatility,\u201d he said. \u201cWe are seeing one of the best cost scenarios for fundraising in the last two years.\u201d<\/p>\n\n\n\n

Pedro Frade, in charge of foreign debt at Ita\u00fa BBA, says rates contracted in the last month, both in Treasuries and Brazil risk. However, according to him, attention is focused not only on the next Fed meeting but also on the numbers about inflation and unemployment in the U.S., which could change the market\u2019s mood and shrink the window for issuances. \u201cFrequent issuers benefit from shorter windows,\u201d the BBA executive points out, explaining that these deals are typically completed very quickly, making it possible to avoid market volatility.<\/p>\n\n\n\n

He estimates a concentration of deals in the first half of the month. Given these uncertainties, the number of issuers that will be able to tap into the window is unknown. \u201cMany companies will do their math to determine if the foreign market is the right path for them,\u201d Mr. Frade says.<\/p>\n\n\n\n

One of the points to be monitored by issuers in the next window is the high level of competition with other deals by companies from the same region. According to UBS BB projections, the number of offers from companies in Latin America could reach 15 in September. From Argentine companies alone, three deals are expected.<\/p>\n\n\n\n

\u201cInvestors select not only [a deal] in Brazil but in Latin America as a whole, as the budget is usually the same,\u201d Mr. Podlubny points out. \u201cIt doesn\u2019t mean investors are short of funds but perhaps they don\u2019t have time to dive deep into all deals and may choose to prioritize just a few. That could have an effect, for example, on the size of books.\u201d<\/p>\n\n\n\n

Miguel Diaz, debt market specialist at Santander Brasil, says the scenario is favorable given the current rates in the U.S. market, which have caught the attention of issuers. He expects up to eight issues between September and early October.<\/p>\n\n\n\n

Matheus Licari\u00e3o, head of debt capital markets at Santander Brazil, says investors\u2019 agenda is very positive after Labor Day. He is working with two possible scenarios for the month. In the first scenario, as companies understand that the market has already priced the start of a reduction in interest rates, they choose to launch deals early this month\u2014taking some distance from the U.S. elections. On the other hand, companies could choose to wait for the Fed\u2019s monetary policy decision on September 18.<\/p>\n\n\n\n

If optimism increases after that date, the space could be open to both frequent and new issuers, the executive says. \u201cIt\u2019s a good timing for companies [to access the market]. The question is whether it will be a good or a very good window,\u201d he points out.<\/p>\n\n\n\n

When contacted, Ra\u00edzen said it is always attentive to opportunities in the capital market, thanks to its \u201cstrategic positioning, quality of management, financial innovation,\u201d and investment grade by three rating agencies. \u201cIt\u2019s natural that the financial community keeps us on their radar and sees us as a candidate.\u201d Oce\u00e2nica did not respond to a request for comment.<\/p>\n\n\n\n

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*Por Fernanda Guimar\u00e3es, Rita Azevedo\u00a0\u2014 S\u00e3o Paulo<\/p>\n\n\n\n

Source: Valor Inaternational<\/p>\n\n\n\n

\nhttps:\/\/valorinternational.globo.com\/\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"

With expected interest rates cut in the U.S., Brazilian companies should resume bond issuance 09\/02\/2024 Investment banks are preparing their first meetings with foreign investors to launch Brazilian companies\u2019 issuances in the international debt market. Around six deals are expected for September, according to sources interviewed by Valor, including issuances by Ra\u00edzen and banks. Subsea […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8106],"tags":[25403,25402],"class_list":["post-90809","post","type-post","status-publish","format-standard","hentry","category-murray-news","tag-brazilian-companies-should-resume-bond-issuance","tag-foreign-debt-market"],"yoast_head":"\nCompanies return to foreign debt market in September - Murray Advogados<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/murray.adv.br\/en\/companies-return-to-foreign-debt-market-in-september\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Companies return to foreign debt market in September - Murray Advogados\" \/>\n<meta property=\"og:description\" content=\"With expected interest rates cut in the U.S., Brazilian companies should resume bond issuance 09\/02\/2024 Investment banks are preparing their first meetings with foreign investors to launch Brazilian companies\u2019 issuances in the international debt market. 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