🇧🇷30-Day National Treasury Notes | Brazil

The Brazilian National Treasury Notes, known as NTN, are a unique form of government securities issued by Brazil, particularly for those interested in emerging markets.

The linkage of their value to the US dollar exchange rate adds a layer of diversity and potential currency hedge. However, investors should be aware of the currency risks and the economic context of Brazil when considering these bonds. NTN stands out in the global bond market for its innovative approach to government financing and investor engagement.

Here's a concise overview of their key features:

Issuance and Terms:

• Issuance Form: Originally nominative and non-transferable until April 30, 1997; thereafter, they became nominative and negotiable.

• Term: The maturity term is defined by the Minister of Finance at issuance, varying based on the government's financing needs. In this case 30 calendar days.

Value and Placement:

• Nominal Value: $ 1.00

• Placement: These bonds are directly placed, often involving government and institutional entities.

Value Adjustment and Interest:

• Nominal Value Update: The value is linked to the US dollar exchange rate in the free market, based on average rates before the reference and maturity dates.

• Interest Rate: Set annually by the Minister of Finance at issuance and applied to the updated nominal value.

• Interest Payment: Made under similar conditions as the principal, aligning the income with currency market dynamics.

Terms: Redemption occurs up to the maturity of the interest rate, pre-determined at issuance.