Brazil Offers Low-Interest Loan for Capital Goods Purchase

Brazilian Embraer Announced by the Brazilian Development Bank (BNDES) at the end of June, the financing line at lower interest rates for purchase and production of capital goods  -  buses, trucks and executive jets,  started being made available in early August and is valid for operations cleared by December 31st, 2009.

According to information supplied by a spokesperson for the BNDES, the lower interest rates is part of a program for incentive to financing granted by the BNDES to try to stimulate the Brazilian economy in the face of the crisis.

The lower interest rates should benefit companies like Embraer, for the sale of executive jets. The new rate of 4.5% a year should stimulate company sales. The financing for executive jets already existed, but the interest rate was 8% a year.

The BNDES line is valid for the purchase of national aircraft, like the jets produced by Embraer and by some smaller companies. The financing may be as high as 100% of the value of the jet for small and medium companies and 80% for large companies.

According to information supplied by the bank, in financing operations for the purchase of capital goods the interest rate should be fixed and reduced to 4.5%. This represents a 56% reduction in the average price, which is currently 10.25% a year.

The financing for the purchase of buses and trucks (excluding the Procaminhoneiro program, to have different conditions), with participation of up to 80% by the BNDES, should have fixed interest rates of 7% a year (also up to December 31st, 2009), resulting in a 32% reduction in the end rate, currently at 10.25% a year on average.

The capital goods export financing, in the Pre-Shipment line, should count on 62% reduction in the final rate, from the current 12.05% a year to 4.5% a year, fixed rate.

Anba

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