Brazil Ctrl Bk Fails To Sell Entire Lot Of Dlr-Pegged Bonds
Dow Jones Newswires
RIO DE JANEIRO -- Brazil's central bank Friday held its second auction of dollar-pegged 'NBCE' bonds in as many days, but unlike Thursday, it failed to sell the entire 300,000 lot.
The monetary authority sold 206,000 securities, which analysts say reflects the nervousness and uncertainty plaguing the country's financial markets.
"There was a lack of demand, which shows the market had little appetite for the bonds," said Joaquim Paulo Kokudai, fixed income director at Lloyds bank in Sao Paulo, who added that the shorter expiration date might have further damped enthusiasm.
The NBCEs auctioned Friday, offered to give the market a hedge against exchange variations, expire on July 4 this year, and yield an average rate of 11.9% plus exchange variation. This compares to the 300,000 securities sold Thursday, which mature on Feb. 20, 2001 and will yield an average rate of 18.99%, plus exchange variation.
Kokudai said he didn't expect the government to hold further dollar-pegged bond issues for a while, "at least in the short term.
"The government should wait a bit for things to calm down," he said, noting that some banks might be reducing their exposure to government bonds as the crisis shows few signs of dissipating.
On January 14, the monetary authority held a similar auction, in which the notes yielded an average rate of 17.08%, and on January 7 the same notes yielded an average rate of 15.27%.
-By Jamie McGeever (5521) 580-9394; jmcgeever@ap.org
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