The storm had extratropical origins, as a blocking pattern set up over the S. Atlantic, resulting in trough fracture and leaving a piece of energy behind in its wake off of the coast of Brazil. With marginally favorable SSTs and a sharp enough temperature difference between the sea surface and top of the troposphere (i.e. the temperatures aloft were cold enough to counteract the marginal SSTs), the system gradually converted to tropical origins much like you sometimes see tropical/subtropical storms form from remnant frontal boundaries (or even upper lows).

Normally, the water temperatures are colder than they were in March, plus the blocking pattern does not exist and storms are relatively progressive throughout the hemisphere. Upper winds are also, in general, not condusive to tropical development. It's possible, but really unlikely. But, as 2004 has proven...anything can - and does - happen.