Brazil's Treasury on Friday asked Banco Itau to co-manage a "possible sale" of its first global bond denominated in reais, one day after naming Goldman Sachs and J.P. Morgan to lead the sale.
Vice Treasurer Jose Gragnani told Reuters that Itau would help sell the bond, which would differ from all others Brazil has ever sold.
"To have a bank with the size and experience of Itau is always important, principally when dealing with a sale in the local currency," he said on Friday.
Asked about the size and term of the bond, Gragnani said: "Nothing is certain."
Some analysts said the local bank was included after the Treasury encountered heavy interest from Brazilian investors.
"The Treasury could be receiving inquiries from locals that want to go into that bond. And that's the reason why they may have decided to hire Itau for that domestic demand," said Pedro Tuesta, senior economist for Latin America with research firm 4Cast.
The award of a mandate usually means a bond would launch within a matter of hours, but Gragnani on Thursday said questions remained as to how to structure the issue, which will be denominated in the local currency, the real.
The new bond would help limit a problem that has prompted emerging market debt crises - the struggle to pay back loans in dollars by collecting revenues in volatile domestic currencies. Selling a global bond in the local currency would eliminate such an asset-liability mismatch.