Brazil bond, stock offerings seen rising in 2009

Wed Jan 21, 2009 2:24pm EST
SAO PAULO, Jan 21 (Reuters) - Stock and bond sales in Brazil may grow as much as 20 percent in 2009 as risk appetite rebounds and lower borrowing costs lure companies back into local capital markets, the country's investment banking association said on Wednesday.
Sales may reach 120 billion reais ($51.02 billion) in 2009, said Alberto Kiraly, a vice president at the association, known as ANBID, after a 30.7 percent slump in 2008 to 101.85 billion reais.
Kiraly said the bulk of the sales would be in bond offerings as investors slowly regain their appetite for risk and companies become more willing to borrow as benchmark interest rates fall. A turmoil in global markets last year crushed demand for corporate debt and triggered a drought in initial public offerings.
"The recovery of this market is conditional on the return of foreign investors," said Kiraly, who is also a director at Banco Votorantim.
Investors have started to require lower yields on Brazilian corporate bonds than in the final months of 2008, prompting several companies to prepare to sell debt in the local capital markets, he said.
Companies may tap the fixed income market with bonds maturing between 18 months and 24 months as yields on long-term debt remain high.
Debt sales should compensate for an expected dearth of stock offerings in the first half of 2009, Kiraly said.
Brazil's ItauBBA, the investment banking arm of Banco Itau Holding Financeira (ITAU4.SA), led the ranks in equity and bond underwriting in Brazil, ANBID said.
Credit Suisse (CSGN.VX) and UBS (UBSN.VX), which led the rankings in stock offerings for several years, fell to second and third in 2008, the association said. Bradesco's (BBDC4.SA) investment banking unit ranked second in bond underwriting, while Banco do Brasil (BBAS3.SA) ranked third. ($1 = 2.352 reais) (Reporting by Aluisio Alves; Writing by Elzio Barreto; Editing by Richard Chang)