March 21, 2024 (NO COMMENTS)

Development bank IDB will lend its credit rating to unlock cheaper USD/BRL hedges out to 25 years

The Inter-American Development Bank, alongside the government of Brazil, has announced a new structure that involves lending out its AAA credit rating to foreign investors to provide them with access to cheaper long-dated foreign exchange hedges for projects in the country. While liquidity for US dollar/Brazilian real hedges is scarce beyond the one-year point, the new structure allows Brazilian banks to tap the IDB’s credit rating to offer FX derivatives hedges to foreign investors in local