Citigroup Asked Brazil To Buy A Stake In Bank-Energy Min
November 24, 2009
Brazilian Energy Minister Edison Lobao said Tuesday that Citigroup earlier this year asked the Brazilian government to buy a stake in it as the bank was seeking a cash infusion.
The government reviewed the offer, he said, but declined to take a stake.
"Citigroup offered the Brazilian government the chance to buy stock during the financial crisis," Lobao said after a presentation at the Brazilian-American Chamber of Commerce. "The bank was in a lot of difficulties, but the Brazilian government concluded that the country had to emerge from the financial crisis first."
Citigroup had no immediate comment on the energy minister's remarks. The Brazilian government also declined to comment further.
The proposal from the banking giant is another sign of Brazil's status as one of the developing countries that's weathered the financial crisis better than developed nations. The country has won investment-grade ratings from all three major rating agencies. It also recently agreed to purchase up to $10 billion in bonds from the International Monetary Fund, after decades of being a debtor to the IMF.
Lobao noted that Brazil exited the recession faster than expected, with the government forecasting that growth will exceed 4.5% in 2010.
Lobao said that the talks with Citigroup occurred "probably in the beginning of this year" and took place in the U.S.
Lobao declined to give details on the size of the stake Brazil was offered. He said he assumed the terms of the deal would have been similar to those agreed with other governments, including the U.S.
Over the course of the financial crisis, Citi has sold stakes to several large state-owned foreign investors, including the Abu Dhabi Investment Authority, the Government of Singapore Investment Corporation Pte Ltd, and the Kuwait Investment Authority, in an effort to improve its capital position.
At the height of the financial crisis last autumn, the U.S. government stepped in to bail out the banking sector, including Citi. It now holds a roughly 34% stake in the bank after injecting some $55 billion.
Lobao added that, in hindsight, Brazil made a misstake by not buying a piece of the bank. We "missed a good opportunity to make big profits, besides the great prestige that it would (have) conferred on Brazil."
The deal was analyzed by the heads of central bank and the Finance Ministry as well as the President Luiz Inacio Lula da Silva, Lobao said.
By: Fabio Alves
Source: The Wall Street Journal
Brazil Central Bank: Aldo Mendes Named Monetary Policy Director
November 18, 2009.
Brazilian Central Bank President Henrique Meirelles has named Aldo Luiz Mendes to serve as the bank's monetary policy director, the institution said Monday.
Mendes, 51, is currently president of the Alianca do Brasil insurance company and until earlier this year served as vice president for Finances, Capital Markets and Investor Relations at Brazil's state-controlled Banco do Brasil. He also previously served as vice president of Brazil's National Association of Financial Market Institutions, or ANDIMA, and as a member on the administrative board of the BM&F commodities and futures exchange.
Mendes will replace Mario Toros, who is resigning for personal reasons.
The new director comes to Brazil's central bank ahead of a period of possible alterations in the country's monetary policy. The bank has cut the country's reference Selic interest rate by 5 percentage points this year to a record low of 8.75% annually. According to recent market surveys, however, the institution is seen raising the rate to as much as 10.5% by the end of 2010 in an effort to head off inflation pressure in a gradually recovering local economy.
By: Gerald Jeffris
Source: The Wall Street Journal
Financial Times Special Report: Investing in Brazil
November 13, 2009.
This special report from Financial Times on Investing in Brazil highlights the following topics:
November 24, 2009
Brazilian Energy Minister Edison Lobao said Tuesday that Citigroup earlier this year asked the Brazilian government to buy a stake in it as the bank was seeking a cash infusion.
The government reviewed the offer, he said, but declined to take a stake.
"Citigroup offered the Brazilian government the chance to buy stock during the financial crisis," Lobao said after a presentation at the Brazilian-American Chamber of Commerce. "The bank was in a lot of difficulties, but the Brazilian government concluded that the country had to emerge from the financial crisis first."
Citigroup had no immediate comment on the energy minister's remarks. The Brazilian government also declined to comment further.
The proposal from the banking giant is another sign of Brazil's status as one of the developing countries that's weathered the financial crisis better than developed nations. The country has won investment-grade ratings from all three major rating agencies. It also recently agreed to purchase up to $10 billion in bonds from the International Monetary Fund, after decades of being a debtor to the IMF.
Lobao noted that Brazil exited the recession faster than expected, with the government forecasting that growth will exceed 4.5% in 2010.
Lobao said that the talks with Citigroup occurred "probably in the beginning of this year" and took place in the U.S.
Lobao declined to give details on the size of the stake Brazil was offered. He said he assumed the terms of the deal would have been similar to those agreed with other governments, including the U.S.
Over the course of the financial crisis, Citi has sold stakes to several large state-owned foreign investors, including the Abu Dhabi Investment Authority, the Government of Singapore Investment Corporation Pte Ltd, and the Kuwait Investment Authority, in an effort to improve its capital position.
At the height of the financial crisis last autumn, the U.S. government stepped in to bail out the banking sector, including Citi. It now holds a roughly 34% stake in the bank after injecting some $55 billion.
Lobao added that, in hindsight, Brazil made a misstake by not buying a piece of the bank. We "missed a good opportunity to make big profits, besides the great prestige that it would (have) conferred on Brazil."
The deal was analyzed by the heads of central bank and the Finance Ministry as well as the President Luiz Inacio Lula da Silva, Lobao said.
By: Fabio Alves
Source: The Wall Street Journal
Brazil Central Bank: Aldo Mendes Named Monetary Policy Director
November 18, 2009.
Brazilian Central Bank President Henrique Meirelles has named Aldo Luiz Mendes to serve as the bank's monetary policy director, the institution said Monday.
Mendes, 51, is currently president of the Alianca do Brasil insurance company and until earlier this year served as vice president for Finances, Capital Markets and Investor Relations at Brazil's state-controlled Banco do Brasil. He also previously served as vice president of Brazil's National Association of Financial Market Institutions, or ANDIMA, and as a member on the administrative board of the BM&F commodities and futures exchange.
Mendes will replace Mario Toros, who is resigning for personal reasons.
The new director comes to Brazil's central bank ahead of a period of possible alterations in the country's monetary policy. The bank has cut the country's reference Selic interest rate by 5 percentage points this year to a record low of 8.75% annually. According to recent market surveys, however, the institution is seen raising the rate to as much as 10.5% by the end of 2010 in an effort to head off inflation pressure in a gradually recovering local economy.
By: Gerald Jeffris
Source: The Wall Street Journal
Financial Times Special Report: Investing in Brazil
November 13, 2009.
This special report from Financial Times on Investing in Brazil highlights the following topics:
- 2016 Olympics
- Banking
- Capital Markets
- Power Generation
- Agriculture
- Metals & Mining
- Sugar & Ethanol
- Oil & Gas
- Bolsa Família Scheme
- Education
- Housing Program
- Environment
- Infrastructure
- Tourism
- Business of Fashion
