* Caixa's Percival expects yields to decline soon
* Moody's move follows years of fast credit growth
SAO PAULO, March 21 Caixa Econômica Federal
will stick to its original plan to raise up to $2.5
billion in bonds and loans in global debt markets this year
despite a decision by Moody's Investors Service to lower the
issuer ratings of Brazil's largest mortgage lender.
Borrowing costs for Caixa may tick up higher in the short
run but will decline when the bank begins to present its
fundraising plans to investors, said Chief Financial Officer
Márcio Percival in São Paulo. He did not give a timetable for
those meetings or when the bank could tap global credit markets.
"We could even pay a little more in borrowing costs but the
plan to raise funds overseas has been maintained," Percival
His remarks come a day after Moody's Investors Service
lowered the long-term issuer ratings of Caixa, citing an eroding
capital position after years of rapid credit expansion. Analysts
led by Alexandre Albuquerque cut Caixa's ratings to "Baa2" from
"A3" with a positive outlook - meaning that an upgrade would be
likely to happen within 12 to 18 months.
The unexpected decision reflects the growing concern among
investors and analysts over Brazil's increased use of state
lenders to revive growth regardless of the strategy's fiscal
consequences. According to Percival, investors got in touch with
Caixa executives throughout the day, trying to understand the
extent of the decision.
Caixa is ramping up borrowing and requesting more frequent
capital injections from its largest shareholder, Brazil's
federal government, as it embarks on an ambitious growth plan.
Caixa has been instructed by President Dilma Rousseff to boost
credit access for individuals and companies while aggressively
reducing borrowing costs.