UPDATE 1-Brazil eyes euro, yen markets to finance domestic companies
(Adds Valle quotes, background)
COSTA DO SAUIPE, Brazil, March 28 (Reuters) - Brazil is looking at the euro zone and Japan to open new financing options for companies that are expected to invest in the country's infrastructure sector, Treasury undersecretary Paulo Valle said on Friday.
After returning to the euro capital market this week following a six-year hiatus, the Treasury may sell yen-denominated bonds in the next few months to start building a yield curve there, he said.
"We have a strong demand from the Japanese market," Valle told investors on the sidelines of a meeting hosted by the Inter-American Development Bank in a resort 47 miles (75 km) north of Salvador. "Maybe this year we'll start again to issue bonds in that market to open it to the corporate sector."
Brazil is trying to boost funding alternatives to domestic companies in order to encourage much-needed investment in President Dilma Rousseff's infrastructure program. Initial disagreement over the return rates for a number of concessions for airports, roads and railways have put the program on a slow start.
Until recently, the Treasury had focused mostly on the market for dollar-denominated global bonds in order to create a liquid yield curve there. This year, however, it decided to diversify its investor base, Valle said.
The first step was to return to the euro market, where Brazil had only two outstanding bonds maturing in the next few years. On Thursday it sold 1 billion euros worth of seven-year global bonds at a yield of 2.961 percent, its first euro-denominated issue since 2006. (Additional reporting by Alonso Soto; Editing by Chizu Nomiyama and Chris Reese)