Brazil launches second issuance of sustainable bonds

Brazil’s National Treasury on Thursday announced its second issuance of sustainable bonds on the international market. This follows the country’s inaugural sustainable bond issuance last November, which successfully raised USD 2 billion.

At the time, the demand for the assets “largely exceeded” expectations, reaching almost USD 6 billion, prompting the swift decision for a second issuance.

The bonds from this latest operation will mature in 2032, with a seven-year term. They are tied to Brazil’s commitment to allocate the equivalent amount of the net proceeds to sustainability and social development projects. These projects include renewable energy, clean transportation, climate change adaptation, poverty alleviation, and access to basic infrastructure. 

The parameters for this batch of sustainable bonds were outlined in May, when it was defined that 50 to 60 percent of the funds raised will be dedicated to environmental initiatives, with the remainder allocated to social expenses.

With the operation, the government also hopes to lengthen the term of its external debt — currently at 7.07 years — and diversify indexers and the investor base.

Led by financial giants Bank of America, Goldman Sachs, and HSBC, the bonds are being issued on the global market, with results expected to be announced later today.