January 18, 2018 / 2:45 PM / a year ago

UPDATE 1-Brazil offers $1 bln in reopening of 2047 dollar bond -source

(Adds details, context)

BRASILIA, Jan 18 (Reuters) - Brazil on Thursday offered an initial $1 billion worth of 2047 dollar bonds in the first sovereign debt transaction of the year, a source with direct knowledge of the matter told Reuters.

In a statement, the National Treasury said it had hired Citigroup Inc, HSBC Holdings Plc and Morgan Stanley to underwrite the reopening of its 5.625 percent Global 2047 bond. There were $1.5 billion worth of outstanding Global 2047 bonds at the end of November.

The government initially suggested a price for the reopening that would yield around 5.80 percent, according to Thomson Reuters debt service IFR.

The transaction comes a week after Standard & Poor’s widely expected downgrade of Brazil’s sovereign credit rating.

The cost of insuring against a Brazilian sovereign default held near four-year lows after the downgrade, though it remains close to that of lower-rated peers.

Brazilian foreign debt totaled 121.4 billion reais ($37.9 billion) in November, dwarfed by its 3.37 trillion reais worth of local currency debt.

$1 = 3.21 reais Reporting by Patricia Duarte; Writing by Bruno Federowski; Editing by Chizu Nomiyama and Phil Berlowitz

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