Brazil’s BNDES sets up in Joburg

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Rio de Janeiro - Brazil’s development bank BNDES will open its third international location tomorrow to help drum up business for Brazilian companies in Africa beyond the Portuguese-speaking countries.

The Johannesburg location follows offices in Montevideo and London, both opened in 2009.

“The goal here is to increase the overall portfolio and diversify as well,” said Sergio Foldes, deputy managing director at the bank’s international division in Rio de Janeiro.

Beyond the Portuguese-speaking Mozambique and Angola “there are other markets where Brazilian companies can have very good opportunities, and where we can be of great help to them.”

BNDES in 2012 disbursed 156 billion reais ($65.6 billion), up from 140 billion reais the year before, backed by Treasury loans that boosted the nation’s debt levels and raised concern of a possible credit ratings downgrade.

Faced with the prospect of curtailed Treasury lending next year, the bank in September sold its first foreign-currency bonds in more than two years.

The development bank sees an opportunity in Africa for financing Brazilian capital goods and provision of engineering and construction services for large projects like hydroelectric dams and ports, Foldes said.

The bank will lend at market rates and gain an edge by offering longer loan periods than other banks, he said.

The bank expects to disburse $500 million to Brazilian companies for investment in Africa this year, according to the bank’s press office.

It has disbursed $2.8 billion since 2007, 96 percent for Angola and 1.7 percent for Mozambique.


London Subsidiary


Johannesburg, unlike the London subsidiary, will not have operational autonomy.

BNDES has capitalised the London office, which has a net worth of about 58 million pounds ($95 million), Foldes said.

It will start pilot operations to raise funds from the location in 2014, he said.

The bank in September issued its first dollar-denominated bonds in almost four years, paying a premium of three percentage points over Treasuries in sale of $1.25 billion in 10-year bonds.

In 2011, BNDES issued bonds denominated in Swiss francs.

Brazil’s President Dilma Rousseff authorised the Treasury to release 24 billion reais ($10.1 billion) to BNDES on November 29.

That’s in addition to about 20 billion reais the bank had received this year as of October 14.

The Treasury lent 55 billion reais to the bank in 2011, down from 100 billion reais in 2009, and the goal is to phase out such lending in coming years, Finance Minister Guido Mantega said the same day.

Brazil’s gross debt as a percentage of gross domestic product in October rose to 59 percent, up from 54.3 percent two years earlier.

The budget deficit widened to 3.4 percent of GDP in the 12 months through October, the most since November 2009.

Standard & Poor’s in June placed Brazil’s credit rating on negative outlook, and Moody’s Investors Service in October lowered its outlook to stable from positive. - Bloomberg News

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