24 de septiembre de 2015 / 0:25 / en 2 años

Brazil's CSN says 'totally protected' against forex volatility

BRASILIA, Sept 23 (Reuters) - Brazil’s Cia Siderurgica Nacional said on Wednesday that the dollar portion of its debt is “totally protected” against currency fluctuations, responding to a research note that triggered a sell-off of the company’s bonds by saying the steelmaker failed to hedge its obligations.

The Brazilian real tumbled to a record low on Wednesday amid widening political and economic turmoil, raising fears about the exposure of local companies to the dollar.

Renewed currency intervention by the central bank failed to halt the plunge of the real, which again came under pressure after Congress postponed a vote on two key presidential vetoes to avert a surge in public spending.

CSN bonds plunged on Wednesday, a day after investment bank Itau BBA said in a research note that the company did not hedge its dollar-denominated debt.

Itau BBA later on Wednesday said its report about the steelmaker was “inaccurate” and that CSN protects its exchange exposure by keeping a large portion of its cash position in dollars and buying derivatives.

Beyond its dollar cash position and derivatives, CNS said in a statement that it also carries out hedge accounting. (Reporting by Alonso Soto and Guillermo Parra-Bernal; Editing by Alan Crosby)

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