Government wants to boost the infrastructure

In searching for new long-term financing sources, especially for infrastructure programs, the government will change the rules of what is referred as corporate debt market, reveals the Estado. This market includes the issue of securities as debentures, credit funds, invoices and real state receivables and of agribusiness.

Although the moment is not favorable, particularly due to the increase in economy’s basic interest rates (Selic), the Mobiliary Value Commission (Comissão de Valores Mobiliários – CVM) and the Department of the Treasury are negotiating with market agents, associations, banks and BMFBovespa the change’s details in order to untie these business. The changes try to anticipate a new low interest scenario, which will make the papers more attractive by reducing financing costs and creating an alternative to BNDS, also saving the National Treasure, as long-term resource source.

The government evaluates allowing the widening of debentures’ offer with the distribution restrict efforts. Thus, a larger public of investors could acquire the papers in the same operation. Today, issues are limited to 20 acquisitions or subscriptions per operation. Negotiations include, yet, the allowing to the pension funds the purchase of debts of close corporation debts, currently limited to open companies listed at the Market. The government and the market also discuss the inclusion of more companies, in addition to the 20 companies already granted, in the concept of frequent issuers of these debt papers.

These are part of the widest discussion regarding a larger access of companies to the bond market, including shares. Department of the Treasury and CVM lead the arrangements. The theme is under evaluation/study by agency internally and also along participants of the market, informed CVM. It also says that the aim is to modernize the bond market regulation with innovative structures, supervision experience and market agents’ demands.

Papers. The changes would also reinforce the government’s attempt in using debentures with the infrastructure. In 2011, the Department of the Treasury reset Income Tax on these papers. But it did not please. The model is considered bureaucratic, demanding the creation of consortiums, approval of each project in ministerial sector, as long as it is classified as priority. Result: since then, only US$ 2,17 billion securities were for this modality.

Involved in the negotiations from the beginning, Cetip bets in reforming these securities in order to turn the bond market into the main source of long-term financing and to increase the competitiveness of the companies. It is necessary to take the private pension to investment in production. More money circling means more economic growth, said the Commercial and Products Executive Director, Carlos Ratto. The government is sensible to this and we see a lot of good will.

Market. The private security stock registered at Cetip accounts for US$ 92 billion, but the participation in the GDP still is small, equivalent to 5% of the national wealth – in Chile, the part reaches 11.7% and in the United States, it reaches 54% of the GDP. There are US$ 45 billion in corporate debts of national companies issued abroad.

In Brazil, it is still a maturing market. Until 2009, this financing alternative was reserved only for open companies. In 2010, the government began releasing taxes on these securities. Last year, 53% of open corporations used these instruments to finance -77.5% with debentures. Closed corporations already hold 64% of operations.

And those are just the public service concessionaires, above all highways, power, logistics and oil, the largest issuers of corporate debt: 42% of those entered the market in 2012, according to the Centro de Estudos de Mercado de Capital (Cemec-Ibmec). The average cost of these securities stayed at 9.9% in the year of 2012. In comparison, the expenses of BNDS cost 6.5%. In commercial banks, it is not below 18.5%.

The edge of the corporate debt buyer is ruled by 1,030 investment funds, but the pension funds want a larger part, since they have to diverse the portfolio and fulfill minimum profit goals to their holders. In 2012, the so called institutional investors had only 8% of their portfolios formed by corporate securities in general. The foreign investors only had 1.2%, according to data of Cemic-Ibmec. But there is no silver bullet to boost this. We will not solve everything at once. Those changes are a good start, days the Commercial and Product Executive Director, Carlos Ratto.