Brazil Bonds Cancel Sales--Bad News Afoot?

Two of Brazil's biggest banks call a bond sale off--does this have deeper implications?

We've seen a whole lot of tumult going on in the United States bond markets, the European bond markets, even the Chinese bond markets have been having a rocky go of things these last couple weeks.

But for those of you thinking to take refuge in a relatively sedate South America, that dream is now officially dead on the word that Brazilian bond sales just got pounded, and badly. Both Odebrecht SA and Banco Cruziero do Sul SA, the only two international issues who were planning sales last week, postponded their sales due to what's being described by Bloomberg as "the highest borrowing costs in three months". How long is the sale postponed for, you wonder? Well, the word "indefinitely" wasn't specifically used, but "until market conditions improve" at least RHYMES with it, if you get my drift.

Brazilian corporate dollar bonds went up .54 percent, which in bond terms, is actually quite a bit. People's taste for risk, it's been suggested, is somewhat down in light of the ongoing rolling disaster that is the European market right now, and what appears more and more to be the complete heat-death of the world economy.

The deepest irony here is that Brazil was purportedly part of a bloc of nations--including India and China--that were regarded as major emerging markets. But that distinction may have been cut off in light of this new development.

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