Brazil sells $284 mln in debt, rolls over 74 pct

www.forbes.com Reuters, 01.10.03, 1:14 PM ET

SAO PAULO, Brazil, Jan 10 (Reuters) - Brazil's Central Bank sold $284 million in domestic debt of $600 million on offer on Friday, its second auction since President Luiz Inacio Lula da Silva took office on New Year's Day.

The securities are part of $1.8 billion in government debt linked to the dollar coming due next Thursday, meaning the bank has already rolled over 74 percent of that amount. It sold $1.03 billion earlier in the day.

In the second auction, the bank sold debt maturing in October and April 2004, agreeing to pay interest rates of 13.77 percent and 13.50 percent respectively.

In the months preceding Lula's election win in October, investors balked at buying government paper for fears that a victory by the one-time radical union boss might nudge the country toward a default, prompting some to demand interest rates as high as 50 percent to buy government debt.

Since then, Lula has repeatedly pledged to honor contracts and maintain tight fiscal policies, encouraging wary investors to line up to buy domestic debt notes again.