Brazil: Federal Public Debt Monthly Report

The Brazilian National Treasury released the Federal Public Debt Monthly Report – January 2009. Please find below the main points:

Primary Market Transactions

In January, Federal Public Debt – DPF issuances reached R$ 38.6 billion and redemptions corresponded to R$ 93.6 billion, resulting in net issuances of R$ 55.0 billion (R$ 54.8 billion refers to net issuances of Domestic Federal Public Debt – DPMFi and R$ 0.2 billion refers to net redemptions of the External Federal Public Debt – DPFe).

 Debt Outstanding

The DPF outstanding held by the public decreased 3.23%, moving from R$ 1,397.34 billion in December 2008 to R$ 1,352,24 billion in January. The DPMFi outstanding (which represents 90.3% of the DPF) decreased 3.46% shifting from R$ 1,264.82 billion to R$ 1,221.10 billion in the same period.

Debt Profile

The share of fixed-rate bonds on the DPMFi decreased from 32.19% in December to 28.04% in January. The share of floating-rate (Selic) securities moved from 35.83% in December to 38.54% in January. On its turn, the share of inflation linked bonds decreased from 29.34% to 30.70% in the same period.

Maturity Profile

DPF maturities in the next 12 months increased from 25.36% in December to 27.71% in January. Almost 52% of DPMFi securities scheduled to mature in up to 12 months corresponds to fixed-rate securities, followed by floating-rate (Selic) securities (29.69%).

 Average Term to Maturity

The average DPF term increased, moving from 3.50 years in December to 3.66 years in January.

 Average Life

 Average DPF life, which indicates the remaining term of public debt principal, increased from 5.60 years in December to 5.65 years in January. Mind this indicator as the most appropriate one for cross country comparisons.

 DPF Average Cost

In cumulative 12-month terms, the average cost of DPMFi moved from 13.56% per year in December to 13.46% per year in January, due to a smaller change in inflation indexes (IGP-M, IPCA, IGP-DI). With regard to the DPFe, the average cost moved from 45.25% per year in December to 43.63% in January, mainly as a result of US dollar depreciation against BRL real (-0.89% in January 2009) when compared with the same month of the preceding year (-0,62%). As a result, the DPF average cost in cumulative 12-month terms moved from 15.91% per year in December to 15.74% in January.

The full document of the Federal Public Debt monthly Report – January 2009 (Portuguese only) can be found at http://www.tesouro.fazenda.gov.br/hp/downloads/divida_publica/relatorio_jan09.pdf

The full English version of this report will be released soon at http://www.tesouro.fazenda.gov.br/english/hp/public_debt_report.asp.