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M A R CH  2 0 0 8. Federal Public Debt Management: The Brazilian Experience. Paulo Fontoura Valle Deputy Secretary of Brazilian National Treasury. Federal Public Debt Management: The Brazilian Experience. Building a Debt Management Department. Building a Public Debt Optimum Portfolio Model.

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M A R CH  2 0 0 8

Federal Public Debt Management: The Brazilian Experience

Paulo Fontoura Valle

Deputy Secretary of Brazilian National Treasury


Federal public debt management the brazilian experience l.jpg
Federal Public Debt Management: The Brazilian Experience

Building a Debt Management Department

Building a Public Debt Optimum Portfolio Model

Public Debt Recent Evolution

B R A Z I L I A N F E D E R A L P U B L I C D E B T

1


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Guidelines for an efficient Debt Management Office (DMO)

  • Organizational objectives and roles should be clear and there should be coordination and sharing of information

  • Government debt management generally operates more efficiently if responsibility for decision making and implementation is not spread across several government departments

  • Sound governance considerations:

  • debt management functions should be organized as separate units given their different objectives, responsibilities and staffing needs.

  • a separate front, middle and back office, and maintain separate reporting lines to the head of the debt management agency.

    Source: The World Bank

2


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Front Office

  • The front office (the portfolio management team):

  • Normally responsible for the analysis and efficient execution of all portfolio transactions, consistent with the portfolio management policy of the debt office.

  • Front office activities include producing cash flow projections (often in partnership with the middle office), borrowing in domestic and foreign currencies, designing and executing trading and hedging transactions, and investing foreign currency liquidity and any excess cash balance associated with the government’s daily departmental cash management.

    Source: Sound Practices in Government Debt Management, World Bank, 2004.

3


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Middle Office

  • A middle office (the risk management team):

  • Normally responsible for establishing a cost and risk management strategy or framework for the government’s debt portfolio, researching and analyzing policy alternatives, and monitoring compliance with the portfolio and risk management policies.

  • The head of the middle office often advises the head of the debt management office on objectives for government debt management and on the cost and risk tradeoffs of various portfolios management strategies.

    Source: Sound Practices in Government Debt Management, World Bank, 2004.

4


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Back Office

  • Back-office (treasury operations):

  • Responsibilities usually include confirming trades, issuing payment instructions for transactions, accounting for trades, arranging collateral transfers, administering loan documentation, and managing relationships with fiscal agents (which, for domestic debt, may be the central bank) and with registers and paying agents.

  • Usually Responsible for managing the systems, and maintenance and updating of existing applications. Compilation of debt statistics and reporting on operational risk or vulnerabilities – often with the help of the middle office.

    Source: Sound Practices in Government Debt Management, World Bank, 2004.

5



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Public Debt Department

(Domestic and External Debt)

FRONT-OFFICE

MIDDLE-OFFICE

BACK-OFFICE

  • Development of short term strategies, related to securities issuances in the domestic and external markets. Domestic market auctions and external issuances.

  • Development of medium and long term strategies, risk management, monitoring macroeconomic aspects and domestic and external investor relations.

  • Registering, controlling, payment and monitoring domestic and external debt budget.

Current Institutional Structure (as working group since 1999 and officially from 2001 on)

7


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FRONT OFFICE

  • Market and Analysis, Monitoring and FX currency purchase operations;

  • Auctions´ demand prospecting ;

  • Yield Curve design;

  • Bond´s Pricing.

  • Internal and External short-term issuance planning;

  • External issuance strategy elaboration- to be submitted and approved by the Committee;

  • New products development;

  • Monitoring the implemented strategies;

  • FX flow analysis.

  • Traditional, exchange and repurchase auctions;

  • Weekly and monthly reports, including Central Bank and National Treasury Report on Public Debt;

  • Structured Operations.

  • External market analysis and monitoring;

  • Execution and pricing of external operations (issuances and liability management);

  • Active management of External Debt operations.

8


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MIDDLE OFFICE

  • Monitor risk exposure indicators of all Asset and Liabilities;

  • Identify and propose the optimal structure of asset and liabilities;

  • Elaborate middle and long term strategy.

  • Accomplish economic and financial research;

  • Participate on the middle and long term financing strategy;

  • Monitor, analyze and forecast domestic and external scenarios.

  • Maintain and improve relationship with investors and opinion makers;

  • Broaden the investors Base;

  • Provide internal and external investors with accurate information and data, aiming at increasing the transparency of the National Treasury´s actions;

  • Assist Rating Agencies.

  • Develop studies on public debt management;

  • Monitor peer countries risk developments;

  • R&D to other areas in the DMO.

9


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BACK OFFICE

  • Execute issuance and canceling as well as bonds repurchase;

  • Interface with clearing houses;

  • Monitor and execute government incentives programs.

  • Manage the financial control of the debt;

  • Establish debt measurement methodology ;

  • Elaborate the debt budgetary plan.

  • Elaborate monthly programming of financial flows;

  • Update accountancy registers;

  • Monitor budget and financial execution;

  • Public debt payments execution.

  • Monitor financial payments of Federal Government guaranteed obligations;

  • Elaborate public debt budget;

  • Control and monitor the system for external debt.

10


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Institutional Advances

  • In 1992, the National Treasury started to issue federal public bonds in regular auctions;

  • In 1999, informally, as a working group, and in 2001, formally, the new public debt management model was implemented based on the DMO structure, setting the National Treasury in line with international best practices;

  • In 2000, the Fiscal Responsibility Law was approved, establishing that, from 2002 on, the Central Bank could no longer issue bonds in the primary market, conducting monetary policy with bonds issued by the National Treasury;

  • In 2001, the first Annual Borrowing Plan was released, aiming at improving the transparency regarding the public debt financing strategy;

  • In 2003, in an OCDE and World Bank event, international specialists conclude that the current public debt risk management model is among the most modern and sophisticated across DMOs;

11


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Institutional Advances

  • In 2003, it was created the Domestic Debt Committee, with monthly tactical meetings. These include the participation of the National Treasury Deputy Secretary and the heads of back, middle and front offices;

  • In 2004:

  • the National Treasury released the first Public Debt Annual Report, aiming at analyzing the evolution of the public debt management, as well as the policies implemented in accordance with the guidelines and parameters previously published in the Annual Borrowing Plan;

  • the National Treasury and the Central Bank signed up a transition agreement, in which from 2005 on, the National Treasury would be entirely responsible for the external debt bonds issuance;

  • In 2007, the National Treasury released the first Federal Public Debt Monthly Report(consolidating both domestic and external debt statistics).

12


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Unified Public Debt Management

  • From 2005 on the National Treasury has become the single institution responsible for both domestic and external Federal Debt.

    • The last step to assure the separation between fiscal and monetary policy functions.

      Structural Benefits

  • Better monitoring of debt management targets stated in the Annual Borrowing Plan;

  • Unified strategy for domestic and external debts;

  • Improvement in government portfolio management (asset and liabilities management);

  • Reduction in debt service costs.

13


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Public Debt Management

  • Lessons:

    • Invest in governance;

    • Separate monetary policy from public debt management ;

    • Define clearly the back, middle and front offices functions, responsibilities and information flows;

    • Invest in IT systems;

    • Build capacity of technical staff;

    • Clearly define objectives, guidelines and strategies;

    • Invest in transparency and in the creation of a Investor Relations Unit;

    • Improve the quality of the public debt statistics;

    • Be constantly aware of the international best practices.

  • Next Steps:

    • Implementation, by modules, of the new Public Debt Integrated System (SID) is already in course;

    • Creation of a Public Debt Council, responsible for defining objectives and guidelines and for approving the Annual Borrowing Plan.

14


Federal public debt brazilian experience l.jpg
Federal Public Debt: Brazilian Experience

Building a Debt Management Department

Building a Public Debt Optimum Portfolio Model

  • Mapping Assets and Liabilities Mismatches

  • Measuring Debt Sensitivity

B R A Z I L I A N F E D E R A L P U B L I C D E B T

  • Developing a Stochastic Model: trade-off between cost and risk

Public Debt Recent Evolution

15



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Risk Management (First Annual Borrowing Plan)

“1st Phase” - Mapping Assets and Liabilities Mismatches(Central Government)

Cash Flow Mismatch (R$ million)

17


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Risk Management (First Annual Borrowing Plan)

“2nd phase” -Measuring Debt Sensitivity -Stress Test over Interest and FX-Rate

Note: Stress tests consider 3-standard deviation shocks on the interest rate (7,8 percentage points) and Real devaluation (56,6%), persisting for a year.

  • The stress analysis demonstrates that the impact in the Federal Public Debt - DPF of a shock of extreme ratios and substantial persistence (i.e., at least one year) in the interest rates and exchange rates would be only 4.7% of the GDP;

  • If the DPF structure were the same as in 2002, this impact would be of 22.2% of the GDP. This represents a reduction of almost 80% of the impact in the DPF between 2002 and 2007;

  • If we take into account that, since mid 2006, the level of international reserves is superior to the Federal Government total debt indexed to exchange rate, one can say that the foreign exchange risk is null. In this case, the total impact would be merely 1.6% of the GDP.

F E D E R A L P U B L I C D E B T

18


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Federal Public Debt: Brazilian Experience (First Annual Borrowing Plan)

Building a Debt Management Department

Building a Public Debt Optimum Portfolio Model

  • Mapping Assets and Liabilities Mismatches

  • Measuring Debt Sensitivity

B R A Z I L I A N F E D E R A L P U B L I C D E B T

  • Developing a Stochastic Model: trade-off between cost and risk

Public Debt Recent Evolution

19


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OBJECTIVE OF PUBLIC DEBT MANAGEMENT (First Annual Borrowing Plan)

BENCHMARK MODEL

Steady State

TRANSITION STRATEGY

Medium/ Long Term

ANNUAL BORROWING PLAN

PAF

  • EXPECTED RESULTS:

  • Composition

  • Average Term

  • Payments

  • Cost

  • Risk

SCENARIOS

GERIR

(Simulations)

Monthly Committee

YIELD CURVE

CURRENT DEBT

Strategic Planning and Execution

Target Definitions

OTHER INPUTS

Accompanying

S C H E M E OF LONG T E R M P L A N N I N G


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Optimal Long-Term Structure for the Federal Public Debt (First Annual Borrowing Plan)

“3rd phase”- Stochastic Model: trade-off between cost and risk

  • The model is based on generation of correlated economic scenarios, in steady state, for the main macroeconomic variables that determine the cost and the evolution of net public sector debt:

    • Interest rate

    • Exchange rate

    • Inflation

    • GDP

  • The simulated trajectory for these variables are used to estimate the cost of each financing Treasury instrument, in addition to the Federal Public Debt (DPF) and the NPSD1/GDP2 evolution, at the end of the period of analysis (10 years).

  • With this information, a DPF portfolio efficient frontier in the space risk-return of the NPSD/GDP is obtained.

  • Each portfolio is different regarding the composition by index and maturities:

    • Fixed rate (1, 2, 5 and 10 year)

    • Interest rate (5 years)

    • Price Index (10, 20 and 30 years)

    • Foreign debt (Dollar: 10 and 30 years; Euro: 15 years)

  • Thus, the portfolio is different, also regarding to measures of refinancing risk: the average maturity and the percentage maturing in 12 months.

1 - Net Public Sector Debt

2 -Gross Domestic Product

21


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Optimal Long-Term Structure for the Federal Public Debt - DPF

Results

For each DPF composition, we obtain a distribution of NPSD/GDP ratios

  • Cost:

    • Average of NPSD/GDP at the end of the period of analysis(10 years)

  • Risk:

    • Percentile 99 of the NPSD/GDP distribution at the end of the period of analysis (10 years)

      For each DPF composition, we obtain the corresponding:

  • DPF Average Maturity

  • Percentage maturing in 12 months

22


Optimal long term structure for the federal public debt24 l.jpg

18,00% DPF

1

17,00%

1

17

10

16,00%

26

4,91%

Average - NPSD/GDP

35

15,00%

1,61%

53

14,00%

63

1

72

13,00%

82

12,00%

20,00%

22,00%

24,00%

26,00%

28,00%

30,00%

32,00%

34,00%

Percentile 99 - NPSD/GDP

Efficient Frontier

Long term 1

Long term 2

Long term 3

Current

Portfolio P

Examples

D

D

NPSD

Portfolio Compositions

Less risky portfolio

Less costly potfolio

Average

% maturing

Portfolio

Price

Percentile

D

D

D

D

Maturity

12 months

Fixed

Interest

Exchange

Average

Cost

Risk

Cost

Risk

Indexes

95

1

10%

0%

80%

10%

54,6

19%

17,34%

20,83%

0,00%

0,00%

4,38%

-12,48%

10

0%

20%

70%

10%

54,0

12%

16,67%

21,84%

-0,66%

1,02%

3,72%

-11,46%

17

20%

10%

60%

10%

46,8

24%

16,48%

22,50%

-0,86%

1,68%

3,52%

-10,81%

26

20%

20%

50%

10%

43,8

25%

15,97%

23,46%

-1,37%

2,64%

3,01%

-9,84%

35

20%

30%

50%

0%

41,4

21%

15,54%

24,65%

-1,80%

3,83%

2,58%

-8,66%

53

20%

50%

30%

0%

34,8

28%

14,51%

27,60%

-2,82%

6,77%

1,56%

-5,71%

63

20%

60%

20%

0%

31,8

29%

14,07%

29,05%

-3,27%

8,23%

1,11%

-4,26%

72

10%

80%

10%

0%

31,2

22%

13,54%

31,02%

-3,80%

10,19%

0,58%

-2,29%

82

0%

100%

0%

0%

30,0

20%

12,96%

33,31%

-4,38%

12,48%

0,00%

0,00%

Long Term 1

27%

29%

38%

6%

35,0

25%

15,03%

25,22%

-2,31%

4,40%

2,07%

-8,08%

Long Term 2

33%

26%

35%

6%

35,4

22%

15,30%

22,66%

-2,04%

1,83%

2,34%

-10,65%

Long Term 3

51%

14%

29%

6%

30,4

34%

15,12%

25,06%

-2,22%

4,24%

2,16%

-8,24%

Atual

28%

38%

20%

14%

35,9

29%

15,24%

29,02%

-2,09%

8,19%

2,29%

-4,29%

Portfolio P

36%

27%

27%

10%

35,8

30%

15,60%

27,48%

-1,74%

6,65%

2,64%

-5,83%

Optimal Long-Term Structure for the Federal Public Debt

Results – Efficient Frontier

23


Optimal long term structure for the federal public debt25 l.jpg

0,5% DPF

Risk

0,0%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

8,0%

9,0%

-0,5%

-1,0%

Fixed rate 35,1%; Floating rate 30,7%; Price

Cost

Index 24,1%; Exchange Rate 8,2%

(Dez/07)

-1,5%

-2,0%

-2,5%

-3,0%

Long Term

Current

Examples

Efficient Frontier

Optimal Long-Term Structure for the Federal Public Debt

Efficient Frontier with Restrictions

  • Examples of Restrictions:

    • Percentage of exchange rate linked bonds: maximum of 20%

    • Percentage of floating rate linked bonds: maximum of 30%

    • Percentage maturing in 12 months: maximum of 30%


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Optimal Long-Term Structure for the Federal Public Debt DPF

Final Considerations

  • The price index linked bonds dominate the efficient portfolios of higher cost and lower risk, representing until 90% of the portfolio, mainly due to the correlation with GDP.

  • Portfolios with a high proportion of interest rate linked bonds have higher risk and lower cost.

  • The fixed rate bonds are part of the majority of the efficient frontier portfolios.

  • Restrict the interest rate debt to the maximum of 30% opens room to fixed rate bonds participation in risky portfolios.

  • Restrict the percentage maturing in 12 months to the maximum of 30% requires the selection of portfolios with higher participation of 2 and 5 years fixed rate bonds, instead of 1 year fixed rate bonds.

  • The exchange rate linked bonds are part of lower risk portfolios with participations between 0% and 20%, due to the existence of international reserves.

25


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Federal Public Debt: Brazilian Experience DPF

Building a Debt Management Department

Building a Public Debt Optimum Portfolio Model

B R A Z I L I A N F E D E R A L P U B L I C D E B T

Public Debt Recent Evolution

  • Annual Borrowing Plan

  • Recent Events

26


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Annual Borrowing Plan 2008 DPF

Objectives of Federal Public Debt Management

Minimize long-term financing costs, while ensuring the maintenance of prudent risk levels and contributing to the smooth operation of the public bonds market.

Guidelines

  • Subject to market conditions, the guidelines for the DPF management are to:

    • Lengthening of average DPF maturities and reducing the percentage of DPF maturing in 12 months;

    • Gradual substitution of floating-rate bonds for fixed-rate or inflation-linked bonds;

    • Improvement of the external liability profile through issuance of benchmark bonds, early redemption program and structured operations;

    • Incentives to the development of the interest rate term structures for federal public bonds on domestic and external markets; and

    • Expansion of the investors base.

A N N U A L B O R R O W I N G P L A N 2 0 0 7

27


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Annual Borrowing Plan 2008 DPF

Federal Debt (DPF) Indicators*

A N N U A L B O R R O W I N G P L A N

Note: In view of the process of full integration between the guidelines and strategies of financing in domestic and external markets the National Treasury started to disclose the limits of the Annual Borrowing Plan only for the DPF. The statistics of the DPF and its subdivisions in DPMFi and DPFe will continue to be monitored in the Federal Public Debt Monthly Report that can be accessed at http://www.tesouro.fazenda.gov.br/english/hp/public_debt_report.asp.

28


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Market Risk DPF

Federal Debt - DPF Composition

Fixed rate and price index bonds participation in DPF and DPMFi

(a) Sovereign foreign-currency external debt and NTN-D exchange rate linked domestic debt. The Real bonds issued in external markets are not included, which are part of the fixed rate share.

P U B L I C D E B T A N N U A L R E P O R T 2 0 0 7

Source: National Treasury

  • Fixed rate bonds together with price index bonds were consolidated as the main DPF financing instruments;

  • The participation of these two instruments increased from 51.8% of the DPF in 2006 to 59.2% in 2007.

Source: National Treasury

29


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The improvement in the composition of the Public Debt reduced considerably the risks on exchange rate and on interest rates...

Market Risk

  • In relation to the Gross Debt (DPF) the risk was reduced in more than 80% in the last 5 years, from 28.5% to 4.6% of the GDP, in a stress scenario;

  • In relation to the Net Debt (DLSP) the risk was reduced even more. In December 2002 the DLSP/GDP ratio would increase 16.5% at the end of a year, in a stress scenario. In December 2007, this same scenario would mean a decrease of 1.27% in the DLSP/GDP ratio, being the 1.56%, increase caused by the interests, compensated by the reduction of 2.83%, caused by the exchange rate;

  • The protection created for having more assets than liabilities in foreign exchange has shielded the DLSP against shocks on interest rate and on exchange rate.

P U B L I C D E B T A N N U A L R E P O R T 2 0 0 7

30


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Refinancing Risk reduced considerably the risks on exchange rate and on interest rates...

DPF Maturity Profile

  • For the first time, since June 2002, the percentage due in 12 months of the DPF reached levels below 30%, achieving more comfortable levels in relation to the refinancing risk.

Average Maturity of DPF and DPMFi

Source: National Treasury

P U B L I C D E B T A N N U A L R E P O R T 2 0 0 7

  • Lengthening the DPF average maturity has contributed to the refinancing risk reduction.

Source: National Treasury

31


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Federal Public Debt: Brazilian Experience reduced considerably the risks on exchange rate and on interest rates...

Building a Debt Management Department

Evolution in Public DebtManagement

Current Public Debt Management

B R A Z I L I A N F E D E R A L P U B L I C D E B T

  • Annual Borrowing Plan

  • Recent Events

32


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A steady level of public external debt with improved profile reduced considerably the risks on exchange rate and on interest rates...

Impact of the “Cleaning Up” on the Federal Government External Debt from 2005 to 2007

R E C E N T E V E N T S

33


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A steady level of public external debt with improved profile

Early Redemption Program - Reduction on External Debt’s Payment Flow – 2006/2007 (US$ million)*

* Since Jan/06 until Dec/07

R E C E N TE V E N T S

* Refers to External Security Debt

Source: National Treasury

34


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A steady level of public external debt with improved profile

DPFe Stock

P U B L I C D E B T A N N U A L R E P O R T 2 0 0 7

Source: National Treasury

  • Net redemption of the Federal External Public Debt – DPFe: USD 5.6 billion, from USD 67.1 billion, in 2006, to USD 61.5 billion, in 2007;

  • Net impact of the strategy in the foreign exchange flow to the country: reduction of USD 12.6 billion (see next slide).


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National Treasury Performance - Big opportunities merge in the domestic market

Domestic medium term fixed rated bonds (NTN-F) - Outstanding and yields (as of Jan-08)

R E C E N T E V E N T S

36

Source: ANDIMA and Bloomberg


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National Treasury Performance - Big opportunities merge in the domestic market

Inflation linked bonds (NTN-B) - Outstanding and yields (as of Jan-08)

R E C E N T E V E N T S

Source: ANDIMA

Note 1: The may/09, aug/10, may/11 and may/15 NTN-B are not issued anymore.

Note 2: There are NTN-Bs with other maturities.

37


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National Treasury Performance - Big opportunities merge in the domestic market

Brazil: Top 5 in inflation linked bonds. (25% of Total Debt)

local currency Emerging Market Government Inflation-Linked Bond (EMGILB) benchmark indexes.

R E C E N T E V E N T S

38


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National Treasury Performance - Big opportunities merge in the domestic market

Government Bond Index-Emerging Markets (GBI-EM)

R E C E N T E V E N T S

Source: JPMorgan

39


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Advances in Public Debt Management – Domestic Debt Strategy

The regular offer of domestic bonds has increased its stock in the market and its liquidity

  • LTN (fixed rate bond): 6,12 and 24 months

  • NTN-F (fixed rate bond): 3, 5 and 10 years

  • NTN-B (inflation linked bond): 3, 5,10, 20, 30 e 40 years

NTN-F 2017

  • First fixed rate bond issued domestically with a 10 year maturity;

  • Consolidation of this important reference point to the internal interest curve;

  • This bond achieved BRL 13.7 billion – attracted institutional investors and others that prefer longer maturities.

Secondary Market: Daily average negotiation (BRL mi)

P U B L I C D E B T A N N U A L R E P O R T 2 0 0 7

Source: Selic


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Performance in Domestic Market – Liquidity Indicators

Daily Turnover* – Fixed Rate Bonds

Daily Turnover* – Inflation linked

Source: National Treasury * as of December-07

Source: National Treasury *as of December-07

R E C E N T E V E N T S

41


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The new frontier: increasing foreign access to the fixed income market

Foreigner´s Investors: Portfolio level (US$ bn)

Foreigner´s Investors: Distribution among Fixed Income instruments (R$ bn)

Source: CVM

Source: CVM

Foreigner's Investors: Domestic Debt Participation*

R E C E N T E V E N T S

The good fundamentals of the Brazilian economy are attracting foreign investors to the domestic debt, but there is still much space to grow.

Source: SELIC

42


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The new frontier: increasing foreign access to the fixed income market

Domestic Public Debt Profile

Considering the guidelines stated in the Annual Borrowing Plan for 2008, in particular the development of the secondary market, the lengthening of the fixed rate and inflation linked bonds and the broaden of the investor base ...

Maturity Distribution of Inflation Linked Bonds

* Estimated

Source: National Treasury jun - 07

R E C E N T E V E N T S

... we believe the foreign investors have an important role to help us in reaching these targets as they usually have a higher participation on fixed rate and inflation linked long term bonds.

* Estimated

Source: National Treasury Jun - 07

43


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Regular income marketConference calls with investors:

In 2007, three conference calls with investors, which counted with the support of important worldwide consolidated financial institutions;

Participation of investors from several sectors. Among them: pension funds, hedge funds and international banks representatives. An average of 100 participants connected in each event.

Improving risk rating within the main rating agencies that evaluate the country. The best notch since the conclusion of Brazilian external debt renegotiation in 1994.

Main factors pointed by the agencies: good results in the external sector, the improvement of the domestic debt profile and the positive results in the fiscal sector;

Active participation in the Latin America and Caribbean Group of Public Debt Management Specialists, recognizing the importance of the enhancement of the public debt management and the development of secondary market of public bonds in the region;

Continuous realization of Roadshows and participation in The BEST Brazil events.

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Moody's

B1

B2

B2

B1

B1

B2

B2

B1

Ba3

Ba2

Ba1

S & P

BB-

BB-

B+

B+

BB-

B+

B+

BB-

BB-

BB

BB+

FITCH

B+

B+

B

BB-

BB-

B

B+

BB-

BB-

BB

BB+

Federal Public Debt Management

Institutional Advances

P U B L I C D E B T A N N U A L R E P O R T 2 0 0 7

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Brazil – the first country that satisfied all the investor relations best practice criteria in Institute of International Finance (IIF) report

Investors Relations: An approach to Effective Communication and enhanced transparency

  • Assessment of 30 key borrowing countries in Investor Relations and Data Transparency Practices.

  • First Release (Dec-05) – Brazilian’s Government reached 37 out of 38 in prioritized terms.

  • Measures:

    • Staff reachable through website

    • Reciprocal links between government agencies

    • Investors able to register for website subscription

    • Investor conference call

    • Regular self-assessment of investor relations activities.

  • Second Release (Sep-06): Based on the combined score (Gerin, operated by the Central Bank of Brazil, and Investor Relations Office of the National Treasury), Brazil has become the first country to score 38 out of 38 in prioritized terms.

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For additional information access relations best practice criteria in Institute of International Finance (IIF) reportBrazilian National Treasury site: www.tesouro.fazenda.gov.brOr contact Institutional Relations area:[email protected]

B R A Z I L I A N  F E D E R A L P U B L I C D E B T

Translation of the original text of this document is provided only for the convenience of the reader. While reasonable care has been taken to ensure the authenticity of the translation, its accuracy cannot be guaranteed. Reliance upon this translation shall be at the reader's own risk. Under no circumstances, shall the Brazilian National Treasury, its officers, employees or agents be liable to the reader or anyone else for any inaccuracy, error, inconsistency, omission, deletion, defect or alteration of the content of the translation from the original Portuguese text, regardless of cause, or for any damages resulting therefrom. The original Portuguese text of this document is the only official version, which can be found in http://www.stn.fazenda.gov.br/index.asp. In the event of any discrepancy or contradiction between the Portuguese and translated version, the Portuguese version shall prevail.


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