Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (46195)	2/6/2009 10:42:14 AM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 218000

Brazil Govt Bank Denies Allegation Of Subsidized Interest Rates SAO PAULO (Dow Jones)--A World Trade Organization report voicing concerns about alleged subsidized credit offered to Brazilian companies by state banks is "superficial and does not stand up to analysis," the president of Brazil's government-controlled National Development Bank, or BNDES, said Friday. The WTO report said government financing was more important in Brazil than in virtually any other emerging market country, with government credit often offered at half the interest rate level of commercial loans. BNDES President Luciano Coutinho told a group of overseas reporters that "the report has no foundation in fact and we are not worried about it." Coutinho said, "The BNDES has been making a limited volume of short-term loans to companies to guarantee their cash flow. Such loans are made at market rates." Coutinho added, "Such loans are being made because of the current credit crisis. Our expectation is that the capital market will resume its traditional role in this area, probably by next year, and the BNDES will return to its traditional role, which is long-term finance." Coutinho said that because of Brazil's previous history of high inflation, capital markets still do not offer long-term financing to most companies. "Beginning many years ago, the BNDES assumed the role of long-term financing for companies in Brazil," Coutinho said. "It still performs this role." Most long-term BNDES loans carry a government-set interest charge of 6.25% plus a spread. Such loans can extend out to terms of 10 years or more. Coutinho said that long-term commercial bank loans for such terms were so scarce that there is essentially no interest rate curve to serve as a benchmark for them. "The BNDES is the benchmark," he said. -By Tom Murphy, Dow Jones Newswires; 55-11-2847-4519; brazil@dowjones.com