The maturity of interest-linked securities caused the Federal Public Debt (DPF) to fall in September. According to figures released this Thursday (29) by the National Treasury, the DPF went from R$8.145 trillion in August to R$8.122 trillion last month, a drop of 0.28%.
In September, the indicator surpassed the R$8 trillion barrier for the first time. According to the Annual Financing Plan (PAF), revised in September, the DPF stock should end 2025 between R$8.5 trillion and R$8.8 trillion.
The internal Public Securities Debt (in securities) (DPMFi) fell 0.31%, going from R$7.845 trillion in August to R$7.82 trillion in September. Last month, the Treasury redeemed R$100.06 billion in more bonds than it issued, mainly in bonds linked to the Selic. This drop was offset by the appropriation of R$75.77 billion in interest.
Through the appropriation of interest, the government recognizes, month by month, the correction of interest that accrues on bonds and incorporates the value into the stock of public debt. With the Selic Rate (the economy’s basic interest rate) at 15% per year, the appropriation of interest puts pressure on government debt.
Last month, the Treasury issued R$157.298 billion in DPMFi bonds. However, with the high volume of bond maturities in September, redemptions were greater and totaled R$257.354 billion.
The external Federal Public Debt (DPFe) rose 0.43%, going from R$300.23 billion in August to R$301.53 billion in September. The main factor was the 1.99% drop in the dollar last month, following the reduction in tensions caused by Donald Trump’s tariffs.
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Mattress
After a rise in August, the public debt cushion (financial reserve used in times of turbulence or strong concentration of maturities) fell again in September. This reserve went from R$1.13 trillion in August to R$1.03 trillion last month. The main reason, according to the National Treasury, was the net redemption (redemptions minus emissions) last month.
Currently, the mattress covers 9.33 months of public debt maturities. Over the next 12 months, R$1.482 trillion in federal bonds are expected to mature.
Composition
With the concentration of fixed-rate securities due, typical of the first month of each quarter, the composition of the DPF varied as follows from August to September:
• Selic-linked securities: 49.29% to 47.47%;
• Inflation-adjusted bonds: 26.10% to 26.81%;
• Prefixed titles: 20.95% to 22.02%;
• Exchange-linked securities: 3.67% to 3.70%.
The PAF predicts that the bonds will close the year in the following intervals
• Securities linked to Selic: 48% to 52%;
• Inflation-adjusted bonds: 24% to 28%;
• Prefixed titles: 19% to 23%;
• Exchange-linked securities: 3% to 7%.
Typically, prefixed securities (with rates defined at the time of issuance) indicate more predictability for public debt, because rates are defined in advance. However, in times of instability in the financial market, issuances fall because investors ask for very high interest rates, which would compromise the government’s debt management.
In relation to securities linked to Selic (the economy’s basic interest rate), these securities are attracting the interest of buyers due to the recent increases promoted by the Central Bank’s Monetary Policy Committee (Copom). The exchange rate debt is made up of old domestic debt securities corrected in dollars and external debt.
Term
The average term of the DPF increased from 4.09 to 4.16 years. The Treasury only provides the estimate in years, not months. This is the average interval in which the government takes to renew (refinance) public debt. Longer deadlines indicate greater investor confidence in the government’s ability to honor its commitments.
Holders
The composition of holders of the internal Federal Public Debt was as follows:
• Financial institutions: 32.53% of stock;
• Pension funds: 23.07%;
• Investment funds: 20.87%;
• Non-residents (foreigners): 10.19%
• Other groups: 13.3%.
With less tension in the financial market, the participation of non-residents (foreigners) rose compared to August, when it was 9.83%. In November last year, the percentage was 11.2% and had reached the highest level since August 2018, when the share of foreigners in public debt was also 11.2%.
Through public debt, the government borrows money from investors to honor financial commitments. In exchange, it undertakes to return the resources after a few years, with some correction, which may follow the Selic rate (basic interest in the economy), inflation, the dollar or be prefixed (defined in advance).
