Top Performing Brazilian Corporate Bonds in USD in 2024

An overview of the standout Brazilian corporate bonds that delivered impressive returns last year.

As 2024 wrapped up, Brazilian corporate bonds denominated in USD stood out as a compelling investment option. Offering a mix of high yields and exposure to one of Latin America’s most dynamic economies, these bonds continued to attract attention from international investors. This post highlights the top-performing Brazilian corporate bonds in 2024, delving into the factors that contributed to their success.

1. Petrobras (Petroleo Brasileiro S.A.)

• Sector: Energy

• Performance Highlights: Petrobras bonds in USD delivered robust returns in 2024, driven by a combination of high oil prices and the company’s successful debt reduction initiatives. The global demand for energy remained strong, and Petrobras capitalized on its dominant position in offshore oil exploration.

• Key Factors:

  • Rising global crude oil prices.

  • Improved operational efficiency and cost control.

  • Investor confidence in the company’s deleveraging strategy.

2. Vale S.A.

• Sector: Mining

• Performance Highlights: Vale’s bonds benefitted from a strong recovery in global iron ore demand, particularly from China. The company’s focus on ESG initiatives and reduced environmental risks also bolstered investor sentiment.

• Key Factors:

  • Surge in iron ore prices.

  • Strategic investments in sustainable mining practices.

  • Strong credit metrics and a history of consistent bond payments.

3. Itaú Unibanco

• Sector: Financial Services

• Performance Highlights: Itaú Unibanco’s USD-denominated bonds outperformed in 2024, supported by Brazil’s stable banking sector and the bank’s strong capital position. Its diversified portfolio and prudent risk management strategies were key contributors.

• Key Factors:

  • Resilience in Brazil’s banking sector.

  • Robust net interest margins amid a high-interest-rate environment.

  • Consistent dividend payouts, signaling financial health.

4. JBS S.A.

• Sector: Agribusiness/Food Processing

• Performance Highlights: JBS bonds delivered strong performance as the company expanded its global footprint and benefitted from increased demand for protein exports. The weakening of the Brazilian real relative to the USD enhanced export competitiveness.

• Key Factors:

  • Strong export growth driven by global protein demand.

  • Operational expansion in North America and Europe.

  • Focus on ESG-compliant practices to attract sustainability-focused investors.

5. Ambev S.A.

• Sector: Consumer Goods

• Performance Highlights: Ambev’s USD bonds were a standout in the consumer sector, driven by the company’s market leadership in beverages and its ability to adapt to changing consumer preferences. Stable cash flows and a strong balance sheet reassured investors.

• Key Factors:

  • Recovery in domestic and international beverage markets.

  • Expansion into premium beverage segments.

  • Commitment to innovation and operational efficiency.

Trends Behind the Strong Performance in 2024

Several overarching trends contributed to the success of Brazilian corporate bonds in USD:

• High Commodity Prices: Energy, mining, and agribusiness sectors benefitted from favorable global commodity prices.

• Resilient Domestic Economy: Despite global challenges, Brazil’s economy showed resilience, with GDP growth and controlled inflation.

• Investor Confidence: Companies focusing on deleveraging, ESG initiatives, and operational efficiency attracted strong investor interest.

What to Watch in 2025

As we look ahead, several factors will influence the performance of Brazilian corporate bonds:

• Global Interest Rates: The trajectory of US Federal Reserve policies will impact demand for emerging market bonds.

• Commodity Market Dynamics: Prices of oil, iron ore, and agricultural products will continue to play a critical role.

• Corporate Strategies: Companies prioritizing sustainability and debt reduction are likely to remain attractive.

Conclusion

The top-performing Brazilian corporate bonds in USD in 2024 demonstrated resilience, strong fundamentals, and alignment with global market trends. These bonds offered investors a mix of high yields and stability, reinforcing Brazil’s position as a key player in the emerging market bond space.

Which bonds or sectors do you think will lead the way in 2025? Share your insights in the comments below!