Brazilian LTN Bonds

Brazilian LTN Bonds

Here, for both your edification and reading enjoyment, is a story of yet another scheme of “bogus bonds” flying around the world of fringe finance.

The Brazilian Letra do Tesouro Nacional (LTN) bonds do have a root in history.

The real LTN bonds issued in the 1970’s were short, stop-gap measures, issued much like currency, but were issued to function as a “year-or-less IOU.”  Inflation was rampant and it was easy to issue an IOU that could be paid with steeply inflated cruzeiros at a later date.

Brazil LTN Bond 1970

Brazil LTN Bond 1970

Cruzeiros were the currency of Brazil from 1942 to 1986 and again between 1990 and 1993(two distinct currencies). In 1986 a new currency which was introduced was called the Cruzado. After a few years, a new currency, the Cruzado Novo, or New Cruzado was introduced, only to be replaced in 1990 by the reintroduction of the Cruzeiro. In another attempt to control inflation in 1993, the government devalued the currency by taking off three zeros from the Cruzeiro and naming the new currency the Cruzeiro Real.  The Cruzeiro was devalued several more times, and through the many devaluations, we at Aegis Journal calculate the actual face value of the bond in the current currency of realm, Brazilian Reals, to be .000000436 R. In US or EU – it is even less of a fraction of a cent.

Check out our calculations and the History of Brazilian Currency Devaluations.

None of the LTN issues were for more than 365 days.  Any cruzeiros that show a maturity dates of more than one year are an absolute FAKE – real dumb FAKE.

But wait, it gets worse…

Until the second half of the 20th Century, the Brazilian Government had issued public bonds in assorted occasions, to raise money to facilitate the nation’s development by specifically targeting infrastructure projects such as re-equipping ports and railways, increasing warehouse capacity, building cold storage rooms, building electrical power plants, and developing basic industries as well as development of rural areas.  Like many countries both in Latin America and elsewhere, the government had borrowed more than they could pay back.

In 1957, the government of Brazil exchanged all of its debt which was issued from 1902 to 1955 for new bonds.  Old debt holders had a five year window in which to make the exchange of old debt for new debt or face losing the value of their bonds.  Thus, any Brazilian Bonds that were issued before 1955 are now worthless.

During the 1979-82 period, the Brazilian economy faced several adverse shocks:

(i)            The 1979 oil shock;
(ii)          Declining terms of trade, due to falling export prices and increases in the prices of imported capital goods and raw materials;
(iii)         A global recession;
(iv)         Unexpected increase in the international interest rates; and last but not certainly not least
(v)          Breakdown of the international financing market for the indebted developing countries in September of 1982  (a typical case of market failure).

The growth strategy adopted by the Brazilian government after the first oil shock directly or indirectly promoted over-borrowing.  The Brazilian default on external debt in the 80′s was the outcome of over-lending by creditor countries’ commercial banks – made possible in part by great international liquidity.

There was no institutional framework to deal with such problems. The main creditor countries organized under the IMF coordinated a strategy , which became known as “muddling through” This strategy did not work out because it did not address the fundamentals of the debt problem. This concerted action of creditor and debtor countries’ governments with the coordination of international organizations is a good example of government failure.

Only more than ten years after the beginning of the debt crisis, the Brady Plan,

proposed by the United States government, created a proper framework of cooperation and understanding between debtor and creditor countries to share the costs of wrong decisions taken in the past by reducing the debt service and the debt itself. In the second quarter of 1994, an agreement was signed between the Brazilian government and the international banks, by which the debt was securitized and transformed into several different bonds. (Source IMF)

So Brazil has restructured and/or exchanged old debt for new debt in 1964, 1983, 1984, 1986, 1987, 1988, and 1992 with the final Paris Club restructuring, and with commercial holders in 1988, 1991 and 1994.

No debt of the Brazilian government from 1970’s is any good by virtue of the Paris Club Agreements, IMF Agreements and as a result of the Brady Bonds / debt restructuring.   Even if the debt holder’s orginal instrument was genuine and not a fake the bondsholders are nine internationally acknowledged debt-restructuring agreements behind.

Let’s also add to the festering pile of misinformation and outrageous lies the fact that you can buy these bonds in bulk from suppliers on Alibaba.com.  Here are some page images of people selling Brazilian LTN Bonds, in bulk, on Alibaba see examples, 1,  23.

All bogus bonds inevitably come with a plethora of additional bogus documents to shore up the reality of the bogus note(s). They come with a Certificate to tell you the bond is real.  How lovely!  They may also come with an age appropriate Receipt.

My favorite is the Tax Statement showing the tax paid on the bond.  The only problem with this pastiche is the idiots cannot figure out the difference between the old Cruzeiro and the new Real.  It is almost as dumb as forging coins with a date like 22 B.C.

And let us not forget the required Verification that the bond or note is real issued by some independent third party who cannot be located.

Oh, as a final comment from the Central Bank of Brazil (BCB) the people who are debtors and who are supposed to pay the note owners. . .

The Central Bank of Brazil (BCB) has been receiving questions about bonds it supposedly issued under the names “Certidão Conjunta de Valor Atualizado”, “Certificado de Repactuação” and “Declaração de Autenticidade”. Such bonds, which carry the logo of the BCB, have allegedly been signed by some members of the Board and by other Brazilian officials.

The BCB herein informs that it is not allowed to issue any kind of Bond or debt note, pursuant to Complementary Act of Congress 101, of 4th of May, 2000.

Furthermore, all bonds and notes issued by National Treasury and held in custody in the Special System for Settlement and Custody (Selic), managed by the BCB, are book-entry, electronically registered and negotiated bonds and notes.

Hence, documents with the characteristics stated above are fraudulent and do not represent debts issued by the Central Bank or by the Brazilian government. The Federal Police have been duly notified about such occurrences.

Stop trading in these worthless fraudulent bonds and share this post with anyone you identify who is screwing with them.

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45 Responses

  1. Robert K says:

    The chart on devaluations is astounding… rampant inflation year after year….

  2. Linda W says:

    Check out this company, InfrAegis, trying to validate one of these Brazilian LTN’s in a federal court: http://www.scribd.com/doc/131021234/Infraegis-vs-Delba-P-Correa

  3. aegisadmin says:

    They were real bonds, they are just worthless.

  4. Eliezer Cohen says:

    The CME (Chicago Mercantile Exchange) is listing some of these bonds on their system through an arrangement with BM&FBOVESPA, the main Brazilian exchange. The Brazilian Government has ‘repacuated’ some of these bonds and given them maturity dates as far out as 2042. Also a small amount of these bonds are available on Euroclear but this is rare because Euroclear charges monthly listing fees. In all cases, buyer should beware and only purchase these types of instruments on a reputable exchange.

  5. aegisadmin says:

    They are bad bonds – re-read the article. Even IF they had not been repudiated debts.. their face value after several devaluations – read this – really read it http://www.aegisjournal.com/wp-content/uploads/2013/02/Aegis-Journal’s-History-of-the-Cruzeiro.pdf
    the 1970 era notes are worth less than a fraction of a cent.

  6. renman says:

    This article is mostly correct and so are the comments..however..there are some rare cases where historic LTNs are legitimate…forget the repacs,”laudo”, recebo..all nonsense. If the historic LTN is actually recorded in Brazil’s internal debt budget then in fact, the credit rights can be leased, sold, or given away,just by signing Deeds in a Public Registry Office. This is true even on Euroclear..which they are not directly listed anyway because E/C creates a Eurobond where the collateral behind it may be an LTN. A buyer’s bank must be able to understand it well enough to enhance an existing line of credit. The valuation is negotiated between the credit right holder and STN and no one else..it IS legal if STN claims it’s legal and that is what people don’t understand.

  7. aegisadmin says:

    It does not matter if they are legit or not. A trillion dollar LTN from the 1970′s is worth less than a penny today as a result of decades of hyper inflation, 7 different currencies, several devaluations and at least two internationally recognized debt repudiations and restructurings. Please, stop thinking these have value – they do not. Even if real – they have little value other than a relic of a mis-managed socialist economy. They were the example before the Zimbabwe 100 Trillion dollars note. Interesting and worthless.

  8. financiar says:

    have buyer for ltn ‘s brasilian
    paymant 14%+2%
    swift mt 542 or 760 from central bank of brasil

  9. NGUYEN DUC CUONG says:

    Dear
    I have 1 bond par value R $ 1,500,000,000
    Brazil’s central bank released in 1972.
    Please tell me the current value of this LTN is worth how much?
    I want to convert the money to do what the procedure?
    I want to sell, there are no buyers?
    Thank you

  10. renman says:

    Aegis, you still don’t get it. The historic LTN’s valuation is negotiated between STN (the Brazilian Treasury) and the entity who has the credit rights and it is recorded as such in Brazil’s Internal Debt Budget. Forget what the face value states, the inflation rate, the historic currency devaluations..etc…it is not something that can be quantified in that manner. It is legal if the treasury says it’s legal, it has a value because STN states it does, whomever owns the credit rights does so because STN acknowledges that he does, the rights of cession take place via the BOVESPA because STN has given them the authorization to do so. You are correct in believing that the actual certificate and the backup paperwork is worthless. However, if it is recorded and acknowledged properly it is legal and has value…but that is rare and most are not legitimate.

  11. aegisadmin says:

    It is worth less than 1 cent USD. I am more than willing to give you $20.00 – as a collectors item for my wall of frauds?

  12. renman says:

    Aegis, you keep referring to non-registered fake physical historic LTNs. You are correct, they are worthless. However, I am not referring to the 99.99% of the “nut-cases” that are promoting this. I am referring to the few that are recorded in Brazil’s Internal Debt Budget that have been de-materialized.

  13. LTN for sale says:

    LTN PURPLE, H SERIES, 1.2B. Contact us if interested, not on Euroclear, TTM in Miami preferred.

    Midwestbunker@gmail.com

    Interested in why Aegis would offer 500k for the bond, and then file suit as referenced above, but now claim they are worthless……hmmmmmm

  14. aegisadmin says:

    We nevered offered 500K for anything – we do not have 500K or even 10K – unless it is a run or something like that. Heck we never offered 500K, not even in Zim Dollars. We have never sued anyone. However, the 1972 LTN are worthless – except as a collectors item. We would pay $50.00 USD for a 1972 LTN for our wall of fraud and shame.

    You no doubt have us confused with someone who has money and lawyers.

  15. Go to the Banco Central DO Brasil(Central Bank of Brazil) and SEE THE TRANSACTIONS TRADED IN LTN on 09/16/2013. THE AEGIS JOURNAL IS A FARCE!

    http://www4.bcb.gov.br/pom/demab/negociacoes/NegTFMS_ExibeDP.asp?data=20130916&grupo=T&periodo=S&idpai=SELICNEGTIT&idioma=I

    Transactions of federal securities in the secondary market

    Period: 09/16/2013 Volumes and prices in Reais (Brazilian currency)
    Quantity by type of security
    Security
    09/16/2013

    09/17/2013

    LTN

    9,330,034

    4,539,236

  16. aegisadmin says:

    READ THE ARTICLE – we are speaking about LTN notes from 1970′s – not current LTN denominated in Reals. We are not a farce and you did not read the article not look at the history of currency devaluations in Brazil our understand the several debt repudiation schemes Brazil has undergone.

    I invite you to actually read the article as we as look at http://www.aegisjournal.com/wp-content/uploads/2013/02/Aegis-Journal’s-History-of-the-Cruzeiro.pdf

    Based upon Brazil’s current economic climate – they appear to be a decent risk.

    1970′s LTN notes being sold on the web and at Alibaba – are worthless, bogus or both.

  17. sherry says:

    Renmen…when you say dematerialized, does this mean that the physical documents, the certificates, the letters showing reissue dates, have been destroyed by the Brazilian government? If they are in possession of the owner, are these then fraudulent? Thanks.

  18. aegisadmin says:

    The other cheeky answer is that what happened to the value of the Brazilian Currency…

  19. Renman says:

    Sherry, the issue is not whether or the certificates are fraudulent. If the Credit Rights and the Obligation are not recorded in Brazil’s Internal Debt Budget the certificate may as well be wallpaper. Also, the owner of the credit rights must be recorded as such at The Brazilian Treasury (STN), free of restrictions and leins, taxes must be paid, and it must be a current repactuation as per the “newer” BOVESPA/STN rules. Obviously, the liklihood of them being legal is very close to zero….but…there are some legal holders. I am aware of few…but then you have a second problem…finding a buyer.

  20. Adilson says:

    Adilson says:
    Dear friend aegisadmin, you should become better informed about the evolution of the Brazilian currency before talking nonsense in your “journal”. In January 1970, when the Brazilian LTNs were issued, worth Cr$ 1,200,000,000.00 (one billion two hundred million cruzeiros) not CRUZEIRO NOVOS, as said in the “journal”. On that date, one dolar (US$ 1,00) worths Cr$ 4350.00 cruzeiros. Thus, Cr$ 1,200,000,000.00 were worth US$ 275,862.06. Today, the value of Cr$ 1,200,000,000.00 updated by official rates of monetary indices, plus contractual interest of 12% per year, worth R$ 8,907,735,499.67 REAIS (R$ 1,427,300,359.18 (main current) + R$ 7,480,435,140.49 (interest). Today, in Brazil, one dolar (US$ 1,00) worth R$ 2.20 REAIS. Thus, R$ 8,907,735,499.67 REAIS are equivalent to U.S.$ 4,048,970,681.66. So, if you have some brazilian LTNs issued in 1970 and want to sell them for $ 50.00, I’ll buy them all.

  21. aegisadmin says:

    Please look at the following chart who’s origin is the Central Bank of Brazil. History of Brazil Currency The second is that Brazil and repudiated its debt twice since the 1970 – so no matter how much interest or principle you wish to add in – they are worthless!!! The obligations were defaulted upon and repudiated. Stop with the snake oil calculations.

  22. ren man says:

    Aegisadmin is correct..the calculations are ridiculous and with regards to historic LTNs. I understand where you are getting the math but it doesn’t apply. 99.99% are not legal and the only two valuations that matter is the negotiated value between the credit right holder and STN….and the buyer’s bank which will be a LTV against an acceptable value because no one would buy them unless they can enhance an existing line with them. So here….I would not focus on its value, I’d try to find out if they were legal…which again…most are not.

  23. aegisadmin says:

    Yes – nicely put. All of the bonds after any of these rescheduling are WORTHLESS and or Counterfeits. Thank You for this link to reality. Arghhhhh

  24. MM says:

    they are a fraud?! ha ha ha! The Rothschild consorcium is buying them right now and also the last Liberty 2000!! fraud? hoax?!! ha ha ha! this guy knows nothing about Brazil! I work for the platform of investments of the Rothschild family and I know what I am talking about, because I have the cash and you? what do you have? get a grip and be useful, talk about your Obamacare fraud. Right? ha ha ha!

  25. aegisadmin says:

    I am honestly speechless…

  26. Henrique says:

    Listen you all: the physical LTN does not exist anymore, it has been replaced by the electronic one and the owner gets from BACEN a certificate stating all the above. The ones that have been repactuated/revalidated by TN and BACEN are valid because they are available on screen with CODIP,CODIV and BACEN aswell as Repactuation number and BACEN and TN does confirm its value. That’s it. Stop confusing this market with a lot of BS.

  27. Robert says:

    Of course body we are stupid , like the public Brazilian authorities….. Don’t speak about Rothschild they never spoke by the passed….. And about your cash ???? May be paper for commodities ???

  28. aegisadmin says:

    Yeah Henrique -

  29. aegisadmin says:

    Yes, there is a comment. Thank You Robert – is what come to mind.

  30. claude says:

    I have access to a buyer who can purchase LTN’s via MT542 from Brazilian central bank. Procedures are below:

    i am direct buyer mandate
    The price is 22% net to seller of actual face value + 3

    Commission is as follows

    1% sell side

    1% buy side

    1% my side

    Seller needs the following in compliance package:

    • Physical scan of LTN front (in the sealed secure plastic).
    • Physical scan of LTN back (in the sealed secure plastic).
    • Certificado Do Tesauro Nacional (orginal)
    • Certificado Do Tesauro Nacional (reissued)
    • Tesauro Nacional (repatriation document)
    • Parecer Tecnico-Pericial
    • Passport Copy
    • CIS
    . Tax receipts

    Seller deposits all documents for the LTN with Central Bank. The buyer verifies the mt542 first, then afterwards makes payment. Central bank releases all the documents to the buyer directly. BACEN is responsible for sending the original documents and transfer of ownership to buyer. Everything will be done through BACEN. All the pages of the packages must be notarized by an attorney. All the information should be placed in one package. No individual documents are to be sent. Buyer will place a 2% non-performance clause in contract to prove his performance. Seller will need to get an official RWA letter from Central bank stating he can send MT542 . Letter should contain sellers name and LTN numbers that will be sent. Or seller needs to instruct Central Bank to issue MT199 Pre Advice asking the buyer’s receiving bank if they are ready to receive the MT542. Then The buyer’s receiving bank will reply MT199 RWA saying yes, they are RWA to receive the MT542.

    All interested sellers please email:

    soadaogod@gmail.com

  31. Tariq says:

    Dear SELLERS/SELLERS REP/MANDATES;

    We are working directly with a MAJOR INSTITUTION BUYER/TRUST that is actively purchasing LTN’S PURPLE H & K SERIES. This Major Buyer has a Past Performance history of closing these Bond Transactions.

    Their procedures are very simple:

    1. Seller submits a COMPLETE KYC PACKAGE WITH PROOF OF PRODUCT(POP) AND GOVERNMENT DOCUMENTS TO BUYER’S INTAKE MGR/ COMPLIANCE DEPT.

    2. UPON ACCEPTANCE, CC WILL BE SCHEDULED WITH BUYER & SELLER TO DISCUSS TERMS, PRICING ETC.

    3. BUYER WILL ISSUE A CONTRACT WITH TERMS, CONDITIONS AND FEE AGREEMENT FOR ALL CONSULTANTS/INTERMEDIARIES INCLUDE.THE BUYER IS PAYING 22 +3 FOR THE PURPLE SERIES LTN’S.

    NEXT STEP IS FOR YOU TO SCHEDULE A CC WITH SELLER/SELLER REP/MANDATE to discuss more details. The Buyer has 4 different programs available to accommodate the REAL Seller. We await the CC with your Seller.

    *KYC TEMPLATE, OFFICIAL COPY OF PROCEDURES, SAMPLE OF MT 542 VERBIAGE ETC will be provided to the Seller/Seller’s Rep/Mandate after CC with myself.

    We await your reply.

    With Regards,

    Tariq Abdul-Aziz, CEO
    Lucilla International, Inc.
    “We Make Business Happen”
    Tele: 850.345.4562
    Skype: tabdulaziz1

  32. aegisadmin says:

    You are a crack addled twit and you are wasting your time which is even a bigger sin.

  33. aegisadmin says:

    The valid ones are electronic the other are confetti – oooooh pretty paper….

  34. HARY says:

    CAN ANY ONE DO THIS?

    1) LTN H reapactuated
    2) contract signed
    3) seller sends MT 199
    4) seller gets 1 milion in 5 days from receipt of MT 199
    5) seller send MT 542 after receiving USD 1 million
    6) payment of 15 million ( minus 3 million commissions ) NETT 12 million
    15 days after receiving SWIFT MT 542
    7) second payment balance 15 million in 15 days after
    Total payments USD 30 million minus 6 million commissions
    commissions split USD 6 million I am buyer mandate 3 million
    USD 3 milion to you

    FOR BOVESPA I have different BUYER
    1) contract in 48 hrs
    2) price 16+4 of current PU value series H
    3) payments to sellers and IM is 25% per week for 4 weeks
    4) Ownership transfer after 30 days after final payment
    5) can do one tranche upto 50
    6) and come back for more tranches
    7) Buyer is in KOREA

    IF YES WRITE TO US QUICKLY AT globalconnectorsATyahooDOTcom

    REGARDS.
    HARY

  35. aegisadmin says:

    run away

  36. David says:

    I can’t believe to this day people still try to push this crap. I’ll leave here just for further reference, a Brazilian National Treasure statement regarding LTNs (could only find a pdf version for the English text).

    http://www3.tesouro.fazenda.gov.br/english/hp/downloads/Public_Debt%20.pdf

  37. John says:

    Aegis, this is cracking me up! You post a reasoned, factually supported article, and get replies about ‘negotiated values’ for bonds that have been ‘repactuated’ and ‘recorded in the Brazilian debt budget’! People have an endless capacity to be swindled, lol.

    I am an attorney in NY, and I have clients both in the US and Latin America. Some of these clients have approached me with papaer they bought at TTMs (table-top meetings, ha, ha!), and they want to ‘dematerialize’ them. Sorry for all the quotation marks, I am just astounded that the scam has its own jargon.

    I personally have a good friend, an intelligent successful broker in the inter-dealer derivatives markets, who bought into this thing hook, line and sinker. He traveled to Luxembourg to go to a TTM where he would buy paper, deposit it into a company account and list the company for trading on a Lux exchange in order to monetize the LTNs by getting project financing. Of course, he was relying on a Brazilian guy to set up the meeting, arrange bank financing, handle the listing …. thank goodness that when he got to Lux, the Brazilian was nowhere to be found, and the when he walked into the bank to discuss financing they threw him out!

    The funniest is when the idiots hawking this paper call each other ‘joker-broker’ and argue about procedures, SWIFT transfers, etc. The supreme irony is that you try to do a service by exposing the farce, and the cockroaches post offers to sell or buy the crap. No good deed goes unpunished!

    Hey buyers – if you want LTNs, just buy shares of Citadel EFT, Inc. …. oh, yeah, you can’t because the SEC shut it down. Sorry.

  38. aegisadmin says:

    Hey man – this is an electronic journal – don’t stop keep going. Never head of TTM – I love it… Please keep going….

  39. Henrique says:

    Hey you all,
    If your LTN has CODIP/CODIV/BACEN, repactuation code and is on Brazilian National Treasury SCREEN, like mine is, then it is 100% valid. Mine is for sale. hjbdmhathtmcom

  40. aegisadmin says:

    We never said they were not valid – WORTHLESS, absolutely worthless yes. The LTN issued in the 1970′s and 1980′ and 1990 are all out of date, and repudiated and or inflated to a fiscal dust particle. Why do you waste you time with such utter folly – LTN are short term notes and can be redeemed if still of value. Really, why sell it if it is so good, have it redemmed. Ughhhhh

  41. CHARPENTIER says:

    Hello
    >
    > Am direct to trader’s office in Hong Kong who is presently buying
    > Venezuela bonds on euro-clear .Need complete information KYC and
    > complete euro-clear pages , If verified that
    > seller is indeed up to sell this bond buyer will close the deal in
    > less than 72 hrs . Contract will be out 3 hours after Complete KYC
    > ,euro-clear pages are submitted and seller has confirmed by phone when
    > trader call then we have closing that is real.
    >
    > Same trader is buying LTN by mt 542 or if LTN is in Euro-clear , Trader
    > will issue contact within 3 hrs is complete KYC and copy of LTN is
    > submitted , You will have to let me know if seller wish to sell or
    > enter PPP because PPP is possible if client submits complete KYC AND
    > ltn BOND COPY .
    >
    >
    > Also same trader is interested in clients with BG CD MTN CASHED BACKED
    > ONLY!!!! Who wish to enter trade only . Complete KYC , bond copy.
    >
    > In Switzerland there is urgent buyer need for Black eagle 1843 pesos ,
    > If you have such seller do let me know along with updated KYC ,perito
    > .
    >
    > Also interested in
    >
    > 1. Liberty 10,000
    >
    > 2.Liberty 100,000
    >
    > 3. Farmer bonds 250,000
    >
    > 4. super petchilli
    >
    > Clean and complete submission will be submitted to the buyer office
    > and clients will be contacted after due diligence vetting is
    > completed .
    >
    > Regards
    > transiteur@orange.fr

  42. sergio rolemberg says:

    Hello sir,

    I have seller with 200 LTNs, we can start with one LTN series H. You can choice if prefer repactued, in DTC or in Euroclear. Please, send me your full protocol (price, terms and procedure) and precedent evidence of closing LTN i before.

    waiting your reply,

    Sérgio Rolemberg
    skype: sergio.farias7

  43. sergio rolemberg says:

    Hello sir,

    I have seller with 200 LTNs, we can start with one LTN series H. You can choice if prefer repactued, in DTC or in Euroclear. Please, send me your full protocol (price, terms and procedure) and precedent evidence of closing LTN i before.

    waiting your reply,

    Sérgio Rolemberg
    sergio.rolemberg@gmail.com
    skype: sergio.farias7

  44. aegisadmin says:

    EuroClear deletes these posts as soon as they come up. They too know they are bogus.

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