Bankers in Brazil remain hopeful of a bright future for ‘capex bonds’ despite the failure of the first tax-exempt domestic infrastructure bond Brazil in to close, with volatile market conditions being blamed. Ascendi and Bertin’s Concessionário Rodovias do Tietê, a toll road operator, was seeking to issue R$650 million in 12 year debt.

The Brazilian government passed Lei 12431 in September 2010, which allows for infrastructure-related corporate bonds to be issued which are income tax-exempt for both domestic and international investors and IOF-exempt for foreign investors.

Barclays was structuring the private placement but the bank declined to comment on what would have been the first to issuance of Lei 12431-approved securities. To qualify for tax-exempt status the bonds must be related to an infrastructure project and have a tenor of at least four years.

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