SAO PAULO–Brazil’s government-run savings and mortgage bank Caixa Economica Federal, or CEF, raised $1.3 billion from an overseas bond issue due in 2019, much more than initially planned, as international investors showed better-than-expected demand.

The bank, which was planning raise around $500 million from the operation, decided to increase the amount after it saw a demand worth $6 billion, according to a banker involved in the transaction who declined to be identified.

Caixa will pay an annual yield of 4.329%, which is equivalent to 285 basis points over comparable U.S. Treasury bonds. The yield paid this time is lower than the bank’s previous issue, in September 2013, when Caixa raised $1.25 billion from a five-year bond, paying an interest rate equal to 325 points over Treasurys.

The operation showed the interest of international investors in Brazilian assets, despite some concerns with tepid economic activity and a lack of confidence among analysts over Caixa’s recent surge in lending.

“Despite certain negative news for the economy and also for the bank, at the bottom line Brazilian assets remain on the radar of international investors. Also, in recent days, global capital market conditions improved and this helped the bank in this issue,” said Carlos Gribel, vice president for emerging markets at INTL FCStone Securities Inc. in Miami.

BB Securities, Bank of America Merrill Lynch, Bradesco BB, BTG Pactual, Itau BBA, and J.P. Morgan coordinated the operation.

The operation was the third global bond issue in the bank’s history, as it continues to raise capital to fund a rapid growth in lending. Some investors and analysts have criticized the government for using Caixa to fuel lending during the recent economic downturn, as they fear it could lead to higher default rates in the future.

Caixa estimates its credit portfolio will grow by up to 25% this year from 2013, which even though it would represent a slowdown from the previous year’s 37% growth, is well above the expansion expected by private-sector banks in Brazil, which estimate credit expansion below 15%.