London Stock Exchange Launches Brazil's First Sustainable Bond

On Friday, June 21, the London Stock Exchange premiered Brazil's first sustainable public bond, issued in November 2023 and valued at BRL 2 billion.

The Brazilian Federal Government issues public debt securities in both domestic and international markets. Domestically, it offers a variety of bonds, including fixed-rate, inflation-linked and floating-rate securities. Through weekly auctions, Brazil aims to enhance yield curves, broaden its investor base and extend the maturity of its debt offerings.

Internationally, the National Treasury of Brazil (Tesouro Nacional) strategically taps global markets to create and maintain liquidity benchmarks. Although foreign debt accounts for only 5% of Brazil's total public debt, the benchmarks set by Brazilian bonds abroad serve as a reference for Brazilian companies seeking access to global markets. Additionally, international issuances help diversify the country's investor base.

In November 2023, Brazil achieved a major milestone by issuing its first sustainable public bond. This bond was denominated in U.S. dollars, had a seven-year maturity and yielded 6.5%. By doing so, Brazil established a "sustainable" benchmark curve alongside the existing "regular" yield curve. Both curves will guide the interest rates that other Brazilian issuers will pay in the global market.

The National Treasury Secretariat (Secretaria do Tesouro Nacional/STN) seeks operational excellence, liquidity enhancement and transparent management of its debt operations. By combining financial considerations with positive environmental and social impacts, Brazil's efforts are in line with global sustainability objectives. Through the issuance of sustainable public bonds, the National Treasury can raise capital while optimizing its external yield curve, contributing to broader economic and social objectives.