Brazilian company offers 2.086 JBS Class A shares for each Pilgrim’s share
Brazilian meat giant JBS said Tuesday (18) that it had submitted a nonbinding offer to the board of directors of Pilgrim’s Pride (PPC), its U.S. subsidiary, to acquire shares held by minority shareholders. The deal would result in the delisting of the chicken producer whose shares trade on the Nasdaq.
Under the proposal, each Pilgrim’s Pride minority shareholder would exchange one common share for 2.086 JBS Class A shares. The exchange ratio is based on the closing prices on Tuesday (18), when JBS shares closed at $13.66 and Pilgrim’s shares at $28.49. JBS owns nearly 82% of Pilgrim’s shares.
Jeremiah O’Callaghan, chairman of JBS’s board of directors, said in a statement that “for more than 16 years, JBS and PPC have worked together as PPC expanded its operations, strengthened its global presence and significantly grew its revenue.”
“We believe this proposal offers PPC shareholders the opportunity to continue participating in PPC’s future performance through ownership of JBS shares, with exposure to a larger and more globally diversified business,” he said. O’Callaghan added that JBS’s long-standing relationship with and familiarity with Pilgrim’s Pride’s employees and operations “should support continuity for employees, customers and business partners throughout the process.”
The company also said the move would simplify its organizational structure and reduce costs associated with PPC’s public listing.
The proposal must be reviewed by a special independent committee of the U.S. company, which is expected to be advised by financial and legal advisers.
Once approved by Pilgrim’s decision-making bodies, the proposal must also receive the approval of a majority of the U.S. company’s shareholders other than JBS. In addition, the transaction will be subject to certain closing conditions. According to the statement, advancing the proposal does not require approval from JBS shareholders.
Once the process is completed, Pilgrim’s shares could cease trading on the Nasdaq.
Citi is serving as JBS’s financial adviser, while law firm White & Case LLP is acting as its legal adviser. Collected Strategies is serving as communications adviser, according to the Brazilian company’s filing.
Weekly outflow is the largest since the series began in 2008 as election uncertainty and high real rates weigh on local equities
Foreign investors pulled R$12.6 billion from stocks already listed on B3 between August 10 and 14, the largest weekly outflow since the data series began in 2008, based on Bloomberg figures. A more cautious stance ahead of Brazil’s elections and intensifying competition for global capital are among the factors behind the move, emerging-market fund managers told Valor.
After inflows peaked at R$56.4 billion in April, non-resident investors withdrew R$38.2 billion over the following four months. In just 10 trading sessions in August, outflows totaled R$18.1 billion, putting pressure on the benchmark Ibovespa stock index, which is down 6.55% this month.
On Tuesday (18), the Ibovespa fell 0.27% to 166,335 points. Against that backdrop, net foreign inflows into Brazilian equities for the year have fallen to R$18.2 billion, virtually the same amount withdrawn in August alone.
Election risk
With technical positioning in Brazilian equities already very light, Daniela da Costa-Bulthuis, an emerging-markets portfolio manager at Dutch asset manager Robeco, said foreign capital is being pulled out by tougher competition for investment flows as well as a lack of clarity over the outcome of the presidential election.
“Domestically, investors are demanding a higher risk premium as the elections approach and visibility on policies for the post-2026 period remains limited,” Costa-Bulthuis said. “Meanwhile, globally, capital is being reallocated to markets with stronger growth and technology exposure, while higher fixed-income yields in the U.S. have reduced the relative attractiveness of some emerging markets.”
While she continues to hold high-quality Brazilian companies with strong balance sheets, Costa-Bulthuis said she would need greater clarity on a “credible fiscal consolidation for 2027” before becoming more constructive on the Brazilian market as a whole.
Raphael Luescher, co-head of emerging-market equities at Switzerland’s Vontobel Asset Management, also said that while equity valuations are objectively cheap, the near-term risk-reward trade-off has been squeezed by election uncertainty, fiscal deterioration and persistently high real interest rates.
Raphael Luescher — Photo: Reprodução/Vontobel
“The market appears to be in a holding pattern amid the political stalemate and the approaching October presidential election, whose outcome will likely be the main catalyst for a repricing of assets in either direction,” Luescher said.
Beyond the presidential race, the composition of Congress will be critical in determining fiscal credibility and the prospects for reform, in Vontobel’s view.
“A president without a functioning coalition in Congress cannot pass constitutional reforms,” Luescher said. “For now, specific and quantified fiscal commitments, especially regarding mandatory spending, remain scarce.”
Despite concerns over election-driven volatility and the sharp foreign outflows, Vontobel remains overweight Brazil in its emerging-market equity funds.
Long-term case
Luescher said the allocation to Brazilian stocks is driven primarily by a long-term view and company fundamentals. The firm focuses on sector leaders with rising returns on invested capital (ROIC) that trade at relatively attractive valuations.
“More broadly, cash-flow returns are mispriced and attractive from a historical perspective, creating an interesting opportunity for long-term investors.”
Beyond the elections, a more modest-than-expected cycle of Selic base rate cuts has also reduced foreign appetite for Brazilian assets, Costa-Bulthuis said. The Central Bank’s cautious tone suggests that “the scope for further reductions is limited and monetary policy will remain quite restrictive,” she added.
Luescher expressed a similar view, pointing to persistently high real interest rates as a key concern for equity investors.
“As long as inflation remains above target, partly driven by the expansion of fiscal stimulus by the Lula government ahead of the October elections, we do not expect the Central Bank, which continues to warn of upside risks, to act decisively on interest rates.”
High real rates remain the main structural obstacle to multiple expansion because they keep the cost of capital elevated, Luescher said. Domestic investors therefore remain underweight equities as redemptions continue and other asset classes offer more attractive returns.
Global competition
Costa-Bulthuis also pointed to portfolio reallocations toward markets with stronger earnings and growth dynamics as a headwind for Brazil.
“There are opportunities across Asia and, in developed markets such as the U.S., Europe and Japan, we are seeing rising yields and positive earnings growth. Brazil therefore faces both a domestic risk-premium adjustment and tougher competition for global capital.”
Corporate earnings in South Korea and Taiwan remain particularly strong, supported by continued investment in artificial intelligence, semiconductors and hardware. Vontobel believes the technology cycle will prove stronger and more durable than the market currently expects.
“For that reason, we see little potential for a rotation in the near term,” Luescher said.
*By Maria Fernanda Salinet and Bruna Furlani, Valor — São Paulo
Casas Bahia, InterCement, Unigel and St. Marche are among businesses seeking broader restructuring after earlier agreements with creditors
St. Marche is among the companies that turned to court-supervised restructuring after an earlier out-of-court debt agreement — Photo: Divulgação
Out-of-court restructuring has gained traction in Brazil as a faster, less costly way for companies to renegotiate debt. But a growing number of businesses are finding that the relief provided by such deals is not enough to keep them afloat.
Casas Bahia, InterCement, Unigel and St. Marche are among the companies that later turned to court-supervised restructuring in search of a broader overhaul. The companies declined to comment.
Restructuring specialists expect more cases to follow as high interest rates remain in place for an extended period.
The latest example is Casas Bahia, which filed for court-supervised restructuring on Sunday (16), with R$17.3 billion in debt, just over two years after renegotiating R$4.1 billion through an out-of-court process. That agreement extended maturities and lowered financing costs and, at a later stage, led to the conversion of about R$1.5 billion in claims held by lenders Bradesco and Banco do Brasil into shares.
Even so, continued losses and difficulty generating cash kept pressure on the electronics and furniture retailer, eventually pushing it toward the more comprehensive restructuring confirmed this week.
A growing shift
A survey prepared for Valor by the Brazilian Out-of-Court Restructuring Observatory (Obre) identified 35 cases since 2005 in which companies moved from an out-of-court restructuring to a court-supervised process, with such cases becoming more frequent in recent years. In six instances, the original proceeding itself was converted.
Juliana Biolchi, a director at Obre, said Brazil’s corporate restructuring law imposes waiting periods on successive restructuring filings but does not prevent a company from seeking court protection after an out-of-court proceeding. Because out-of-court agreements typically cover only part of a company’s liabilities, Biolchi believes more businesses could take that route if their cash position shows the first measure was not enough.
A restructuring specialist who asked not to be identified said companies have increasingly limited out-of-court proceedings to financial creditors, leaving suppliers and employees outside the deal. That reduces their ability to carry out deeper operational changes when such measures are needed to put the business back on a sustainable footing.
In cases such as Casas Bahia, where the company needs to rethink the business, close stores and cut jobs, the cost of those measures may ultimately require court-supervised restructuring. “Often, the company’s problem is not just its financial debt,” the source said.
The debate has become more relevant as out-of-court restructuring grows more popular in a corporate environment marked by persistently high interest rates, tight credit and greater difficulty refinancing debt. Financing costs erode cash generation and leave highly leveraged companies with less room to restore their investment capacity.
The figures illustrate the growing use of the tool. From January through July this year, 43 out-of-court restructuring petitions were filed, involving 163 companies and 11,737 creditors, Obre data show. The cases filed in just seven months amount to slightly more than 13% of the 328 proceedings the organization has identified since 2005, when the current Bankruptcy and Corporate Reorganization Law took effect.
In July alone, seven new petitions were filed, involving 63 companies, 1,016 creditors and R$9.6 billion in debt.
Narrower scope
In an out-of-court restructuring, a company negotiates directly with specific groups of creditors and then submits the agreement for court approval. Because the plan can be limited to certain portions of its liabilities, the process tends to cause less disruption to suppliers and customers and less damage to the company’s reputation. It is generally chosen when key creditors are still willing to support a negotiated solution.
A reform of Brazil’s Bankruptcy and Corporate Reorganization Law, approved in late 2020 and in force since January 2021, made the mechanism easier to use. Companies can now file a petition with the initial support of creditors representing at least one-third of the claims covered by the plan and are given 90 days to reach the threshold required for approval.
One expert who asked not to be identified said out-of-court restructuring offers many advantages and that attempting to resolve a crisis through the mechanism is considered worthwhile even if it ultimately proves insufficient.
Luís Caldas, a partner at restructuring consultancy Íntegra, said the initially private negotiations reduce a company’s exposure. By the time its difficulties become public, the business already has a plan approved by a majority of creditors or backed by a significant share of them.
That advantage, Caldas said, comes with a narrower reach. Out-of-court restructuring generally focuses on selected classes of creditors, does not cover tax liabilities and can include labor claims only through collective negotiations with the relevant union.
Broader protection
The move to court-supervised restructuring usually comes when the relief secured under the first agreement is no longer enough to support the financial overhaul, particularly if operating conditions continue to deteriorate, Caldas said. If a company concludes that it will be unable to honor the agreement and begins facing new enforcement actions or cash freezes, a court-supervised process provides broader protection.
The so-called “stay period” generally suspends for 180 days lawsuits and enforcement proceedings involving claims subject to the restructuring. The process also covers a wider range of liabilities, including labor claims, and allows companies to seek specific installment arrangements or settlements for tax debt.
The trade-off is a more expensive and time-consuming proceeding, with a greater impact on the company’s reputation and its commercial and financial relationships. There is also a period of uncertainty between the filing and approval of the restructuring plan.
Unlike an out-of-court proceeding, a company cannot simply choose a limited number of liability classes to restructure.
Asian country invests in technology, biosecurity, and management to increase food production; Brazil is a major meat supplier to the Chinese market
Feed plant of DBN in Beijing — Photo: Danton Boatini Júnior/Valor
Visitors to DBN’s pig-feed factory in Beijing must follow a strict safety protocol that includes putting on foot coverings and spending one minute in a disinfection chamber before entering, under the watch of local employees. The measures to prevent any type of contamination are more than justified. Since the outbreak of African swine fever that wiped out nearly half of the country’s pig herd in the late 2010s, companies in the sector have strengthened biosecurity standards to prevent the disease from returning.
“Every day we test raw materials, for diseases, the environment and disinfection,” engineer Yin (who did not disclose his full name) told a group of journalists and representatives of Brazilian companies who visited the facility this month.
Biosecurity measures were essential to the recovery of China’s pig industry, but investment in technology and management also contributed to the recovery, said the engineer, who is responsible for the feed factory. China’s pig herd currently has 39 million breeding sows, according to the U.S. Department of Agriculture (USDA).
The African swine fever outbreak accelerated the industry’s move toward greater use of technology, with small farms being replaced by large commercial operations. “After the swine fever, production is increasingly shifting toward professional companies and large groups. There are no longer those farmers with fewer than three or five pigs,” Yin said. The shift has also boosted demand for animal feed. At DBN, it is growing by about 5% a year.
Thanks to mechanization, DBN’s feed factory has fewer than 20 employees. Only a few of them were working when the newspaper visited the facility. The health crisis helped advance the adoption of technology across China’s livestock industry, but the movement—which spans several segments—is also linked to another concern in Beijing: food security.
A key focus of the country’s 15th Five-Year Plan, China’s strategy to strengthen food security has the potential to reshape a market in which Brazil is currently one of the largest suppliers. Chinese companies are already the world’s second-largest producers of chicken meat and are recovering pork production. For beef, the USDA projects that China will produce 7.1 million tonnes this year.
Beijing’s intention is to reduce China’s vulnerability in areas considered strategic. In recent decades, Chinese diets have diversified, with meat accounting for a larger share of consumption. With a population of 1.4 billion, the country has traditionally been viewed as one of the world’s largest food importers.
The Five-Year Plan launched in March 2026 to guide China’s economic and social development lists increased grain production among its priorities, along with reducing external dependence and investing in seeds, genetics, and mechanization. It also calls for strengthening the country’s livestock industry.
According to the latest report by the Organization for Economic Cooperation and Development (OECD) and the United Nations Food and Agriculture Organization (FAO), which provides projections for 2026 through 2035, China is expected to continue increasing self-sufficiency in pork, with imports becoming less important. Investments in biosecurity and large-scale production are identified as pillars of China’s policy.
In 2024, China was the main destination for Brazilian chicken exports, receiving 562,200 tonnes. But last year, shipments fell to 250,300 tonnes, less than half the previous volume. Increased Chinese production contributed to the decline, but the main reason was the detection in May 2025 of avian influenza at a commercial farm in Rio Grande do Sul, which led to a ban on Brazilian chicken.
For pork, China imported 159,200 tonnes from Brazil last year, making it the second-largest destination for Brazilian pork, behind only the Philippines.
In 2025, China imported 1.7 million tonnes of Brazilian beef and was Brazil’s largest customer. This year, however, it established a quota system for several supplier countries, limiting Brazilian shipments to 1.106 million tonnes. The introduction of quotas, justified as a measure to safeguard China’s livestock industry, shows that Beijing is also turning to protectionist measures to achieve self-sufficiency.
And animal proteins are not the only target. China also wants to reduce its soybean imports, which currently come mainly from Brazil and the U.S. with which it is engaged in a trade war. To that end, Chinese animal-nutrition companies have been changing feed formulations, using a smaller proportion of soybean meal.
But Suping Geng, DBN Biotech’s vice president for Latin America business, does not expect a significant substitution in the short term because soybean meal remains nutritionally superior in pig-feed formulations. “If you talk to feed producers, they still believe soy is better than corn,” the executive told reporters during a visit to DBN’s laboratory in Beijing.
Financial income already taxed above the new 10% floor could offset dividend withholding and generate refunds for some high-net-worth taxpayers
Carolina Chao and Mariana Oiticica — Photo: Rogerio Vieira/Valor
Brazil’s new 10% minimum tax on high-income earners, which will apply starting with annual tax returns filed in 2027, could have an unintended consequence for the government: some of the country’s wealthiest investors may end up receiving tax credits or refunds.
The tax, created by Law 15,270 of 2025, applies to annual income above R$600,000, or R$50,000 a month. It was designed to offset the exemption granted to people earning up to R$5,000 a month and the lower tax burden for those making up to R$7,350. The legislation was paired with a 10% withholding tax on profits and dividends exceeding R$50,000 a month.
For wealthy individuals whose income comes mostly from financial investments, however, the dividend tax may ultimately have little effect, said a partner at a traditional wealth management firm.
“If you have two-thirds of your billions invested and the other third coming from dividends, you will pay zero,” the person said. “The side effect is that it will give the richest taxpayers a tax credit.”
Tax offsets
Any excess tax withheld on dividends will be taken into account when the annual minimum income tax is calculated and could result in part of that amount being refunded, said Gustavo Haddad, head of tax practice at Lefosse Advogados.
Haddad noted that the withholding is only an advance payment of the annual minimum tax. It applies when a company distributes more than R$50,000 to an individual in a given month.
Receiving less than that amount each month does not mean the taxpayer will escape the 10% levy when all income is added up in the annual return.
“People need to pay attention and manage their wealth properly, looking not only at each individual distribution but at their overall position, including dividends and other income. That is something that needs to be monitored to avoid an unpleasant surprise,” Haddad said.
The minimum tax weighs more heavily on people who receive most of their income through dividends, he added. If two-thirds of a taxpayer’s income comes from financial investments already taxed at 15%, that portion may be enough to bring the effective rate on total income up to the 10% minimum, allowing the amounts withheld on dividends to be fully refunded.
If two-thirds of income comes from dividends, by contrast, the tax already paid on investments may not be enough to meet the 10% minimum across the taxpayer’s total income.
“From a wealth-management perspective, the income tax does not necessarily increase the tax burden in practice, because the proportion of income already taxed may mean that what was withheld during the year is refunded,” Haddad said. “People for whom dividends represent a larger share of income, however, are more likely to be effectively subject to the minimum tax.”
“The client and advisers need to be proactive in their analysis and in rebalancing the portfolio, because that can make a difference to the tax bill in May 2027 or to the size of the refund. The calculation needs to be made over the calendar year,” he added.
Portfolio view
The minimum tax changes the way wealth needs to be managed, but it does not mean the wealthiest individuals will necessarily pay less than they did before the law was enacted, said Mariana Oiticica, the BTG Pactual executive responsible for wealth planning.
“Before, we looked separately at financial assets, real-estate income and offshore assets. That logic no longer works. You have to assess the client’s full situation, look back at what has happened, consider the direction for this year and then make adjustments,” Oiticica said.
“What the change in legislation has brought is complexity. It will not necessarily result in families paying more income tax,” she added.
There is no longer a standard formula, she said. Each situation has to be assessed individually.
If a person’s income comes solely from financial investments, the minimum tax does not affect that income, added Carolina Chao, head of wealth planning at BTG Pactual.
The largest fortunes, however, tend to combine several sources of income, such as rental properties, dividends from holding companies or stock portfolios, and income from overseas companies.
Someone who has already paid 27.5% at source on employment income, or 15% on an exclusive investment fund or offshore structure, has already settled that portion of the tax obligation with the Federal Revenue Service, Chao said.
“It is a minimum tax, not a maximum one,” she said. “The refund applies only to the 10% advanced on dividends. The rest is already behind you.”
Dividend exposure
The taxpayers most affected are likely to be entrepreneurs and self-employed professionals who derive a large share of their income from dividends, said Yuri Freitas, head of wealth planning in Brazil at UBS Global Wealth Management.
For investors living mainly off financial assets, the law’s mechanics make clear that those already paying between 15% and 22.5% on fixed-income investments, 15% on offshore holdings or tax on equities may already have an average rate above 10% and could potentially receive an income-tax refund the following year.
“But we still need to see how the Federal Revenue Service’s system will be designed. Sometimes the mechanics matter as much as the text [of the legislation] itself,” Freitas said.
The dividend tax, as designed, is essentially a tool to ensure that taxpayers reach the minimum 10% rate, he said.
“There may be situations in which the income tax ends up functioning as a large compulsory loan, withheld in one year and refunded in the next.”
When filing the annual return, taxpayers will have to perform two separate tests.
The first is to determine whether the effective tax rate paid by the company distributing the proceeds exceeds 34% in corporate taxes and the Social Contribution on Net Profit, known as CSLL. If that threshold is exceeded when dividends paid to the individual are factored in, the taxpayer is entitled to a refund.
Many companies, however, fall below that threshold, meaning their partners or shareholders will not qualify for reimbursement. Publicly traded companies will also face the challenge of informing the market of the consolidated effective tax rate across the group.
The second test, Freitas said, is to add up all income received, including dividends, while excluding gifts treated as advances on inheritance, inheritances themselves, tax-exempt securities and capital gains.
If R$10 million remains after those exclusions, the minimum tax due would be R$1 million. A taxpayer who had already paid R$1.3 million would be entitled to a R$300,000 refund.
“Where it will really hurt is when a major business owner derives an overwhelming share of income from dividends and has not yet built up a separate pool of financial investments to balance the average tax rate,” Freitas said.
Lawyers, dentists and architects—professionals who operate through companies and use dividends from their businesses to fund their living expenses—are also likely to feel the impact.
Portfolio choices
As UBS reviewed portfolio adjustments, its wealth-planning team examined whether investors might benefit from replacing tax-exempt securities with taxable assets that would raise their average tax rate, Freitas said.
“Even if the return may be slightly higher on an asset taxed at 15%, from a financial standpoint the investor is still better off with the tax-exempt security,” he said, referring to the amount ultimately left in the investor’s pocket. “There is no point maximizing the refund and losing sight of the financial result.”
BTG has created a calculator to help its bankers assess whether portfolios need to be recalibrated based on each client’s overall income profile.
By entering information from the 2025 annual tax return, bankers can determine whether it makes sense to maintain the current allocation to tax-exempt assets or shift somewhat more money into taxable investments, Oiticica said.
“It provides an idea of the client’s tax burden so we can understand what will happen in 2027 and what potential adjustments can still be made this year to take advantage of possible income-tax optimization,” she said.
Luca Salvoni, a tax partner at Cascione Advogados, said that, based on what he has seen so far among the firm’s clients, individuals with substantial net worth who carefully manage the balance between financial investments and dividends will generally be able to avoid an additional minimum-tax liability.
“But that will often mean moving away from tax-incentivized securities,” Salvoni said.
Taxpayers who derive most of their income from dividends and have few other sources of income, by contrast, “will have little room to get around the rule,” he added.
Uneven impact
The principle behind the 10% headline rate is that the wealthiest taxpayers should pay at least that amount, said Hugo Menezes, legal adviser at wealth manager Aware Investments.
“People who have other sources of income, or are in a situation where the company is already taxed at a 34% rate, will effectively not pay that 10%. They already have substantial tax credits, or the company’s operations are already taxed at a significant rate. Many wealthy people will not pay it because they meet those conditions.”
The people likely to feel the greatest impact, Menezes said, are professionals operating under Brazil’s Simples Nacional simplified tax regime or the presumed-profit regime who receive dividends from companies whose effective tax rates do not reach 34%.
“The tax will end up landing on the midsize business owner. For truly high-income individuals, once the annual adjustment is made, it will more or less cancel itself out—they will not pay an extra 10%,” he said.
One question that has emerged in discussions, Menezes added, is how much cash an individual actually needs each month to maintain his or her standard of living.
One option would be for the company to distribute fewer dividends while the individual draws down an investment such as a bank certificate of deposit to supplement monthly income, seeking to “avoid as much of the 10% tax as possible within what the law allows.”
CEO Magda Chambriard says discovery confirms the region’s potential, but further studies are needed to determine commercial viability
Perobras: discovery demonstrates that company will remain a major oil producer in Brazil — Photo: Alexandre Cassiano/Valor
Petrobras CEO Magda Chambriard confirmed Monday (17) the discovery of oil in the Amazonas River Mouth basin, off the coast of Amapá state. “There is oil; we don’t know how much. We are extremely optimistic,” the CEO said while visiting, alongside President Lula, a drilling rig carrying out the first work on the FZA-M-59 block off the state’s coast.
Chambriard said the discovery confirms studies pointing to significant oil potential in the region. Drilling of the Morpho well in the FZA-M-59 block began in 2025. The work is expected to take 15 to 20 days. During her presentation, Chambriard displayed an oil sample collected at the site, confirming the presence of the resource.
The discovery in the Amazonas River Mouth basin demonstrates that Petrobras will remain a major oil producer in Brazil, Chambriard said. The find does not yet have commercial value, she added. “Announcing a discovery is different from announcing a commercial discovery. We still have a series of studies to determine the potential for oil production,” she noted.
According to the executive, Petrobras needs to replenish its reserves after Brazil’s pre-salt oil production reaches its expected peak between 2034 and 2035.
Chambriard also said that once drilling of the first well is completed, the company will have a better understanding of how much oil is present in the area. Petrobras has three more wells to drill in the FZA-M-59 block and another six in different areas of the region. For the remaining wells, the state-owned oil company is awaiting additional licenses from Brazil’s environmental protection agency IBAMA.
Petrobras has so far invested $300 million (about R$1.5 billion) in drilling the Morpho well in the Amazonas River Mouth basin, said Clarice Coppetti, the company’s corporate affairs director. In a news conference after visiting the drillship in Amapá, she said that R$150 million of the investment has gone toward environmental protection and wildlife-response infrastructure. Drilling costs $1 million a day.
Regarding licenses for three additional wells in the FZA-M-59 block, Coppetti said IBAMA issued an opinion on August 10 requesting additional measures, including an increase in the number of vessels and the expansion of capacity at a wildlife-response center in Oiapoque, Amapá, to care for manatees in northern Brazil. She said Petrobras and IBAMA are engaged in “constant dialogue,” with the process being monitored by the Chief of Staff Office.
Chambriard said every stage of the studies on Brazil’s Equatorial Margin has reinforced Petrobras’s optimism about the region’s potential. She noted that the oil giant’s bid for the block, in a 2013 auction, was part of an effort to diversify exploration investment toward Brazil’s North and Northeast. “When that happens, production follows,” she said.
The announcement came after a week of reconciliation between Lula and Senate President Davi Alcolumbre, who attended the event on Monday (17). It also coincided with the start of the election campaign. The announcement came just days after the government issued decrees regulating markets linked to the energy transition, including green hydrogen, carbon capture and storage, and sustainable aviation fuel.
The Equatorial Margin, particularly the Amazonas River Mouth basin, is considered one of Brazil’s last oil frontiers. It is also an environmentally and socially sensitiveregion, prompting years of debate over the feasibility of oil exploration there.
The Amazonas River Mouth discovery was not the first Petrobras has announced on the Equatorial Margin. In 2024, the state-owned company found indications of hydrocarbons at the Pitu Oeste well in the Potiguar basin, off Rio Grande do Norte state. That same year, Petrobras reported “petroleum accumulation” in ultradeep waters at the Anhangá well in the same basin. At the time, the oil giant was appealing IBAMA’s denial of a permit for the Amazonas River Mouth block. The permit was ultimately granted in October 2025.
Banks began testing market in July and managed to distribute 62% of securities after four months of selling less than half
Bruno Spilberg of SPX says demand for corporate bond is there, just not at the rates they seek — Photo: Divulgação
After nearly four months on hold, Brazil’s corporate bond market began showing its first signs of improvement following a restrictive second quarter, although the recovery remains highly limited and concentrated among lower-risk issuers. This pattern is expected to remain through year-end, with the strongest issuers potentially able to extend the maturities of their bonds.
Issuances totaled R$40.1 billion in July, when banks returned to test the market. Another R$59 billion in offerings were underway, according to a survey by ABC Brasil’s research department. Debentures alone accounted for R$28 billion, 40% above the R$20 billion recorded in June.
Another sign of a recovery came from the distribution of offerings. In July, investors absorbed 62% of the securities, the first time the figure had exceeded 60% since February. In previous months, banks had kept a larger share of the issuances in their portfolios as demand retreated. In June, the amount placed in the market was just 46%. In May, it was 42%; in April, 40%; and in March, 47%.
The recovery remains selective and concentrated among large companies and issuers with better credit quality. This means investors have shifted toward these assets in what is known as a “flight to quality.” “Institutional and excellent-quality [securities] are selling well. ‘Mid’ and ‘high yield’ [companies with medium and high returns, but greater risks] are struggling,” said a source who requested anonymity.
The slowdown in the corporate debt market began in March, following a strong start to the year. A series of corporate events interrupted private-credit funds’ fundraising flows and prompted investors to move into more conservative assets, such as bank securities. With demand reduced, several transactions launched between March and April were not fully absorbed by the market.
“Banks ended up acting as a shock absorber during this period of nervousness,” said Samy Podlubny, head of fixed income at UBS BB. According to him, for more than three months, institutions focused their efforts on distributing securities and reducing positions that remained in their portfolios, which limited the launch of new offerings.
With much of this inventory already distributed in the secondary market and fund redemptions more stabilized, issuances began to gain traction again. One of the transactions that marked the reopening of the window was that of Axia, formerly Eletrobras.
The company raised R$1 billion in early July, of which 99% went to funds and individuals, according to data from the Securities and Exchange Commission of Brazil’s (CVM) offering-registration system. It later raised another R$2 billion in a separate offering, concentrated among funds. Taesa, ISA Energia Brasil, and Copel also issued debentures during the month.
Guilherme Maranhão, Itaú BBA’s head of fixed income, said fund redemptions were absorbed without major disruptions in the secondary market. At the same time, banks managed to reduce the positions accumulated during the period of weaker demand. “There was a period of digesting the transactions that remained on the institutions’ books,” he said.
According to Maranhão, the recovery also began to emerge in tax-incentivized debentures, a segment that was hit harder by fund outflows and returned to investors’ radar after the repricing of assets. Recent transactions recorded what was considered strong demand, but the executive stressed that it is still too early to say the window has fully reopened. “The sample is still small.”
Companies continue to need to calibrate the price, size, and structure of offerings to attract investors, particularly for lower-quality credits. In this environment, some fundraisings may come with shorter maturities. “Of course, it varies from case to case, but during periods of volatility, it is common for investors seeking to shorten duration to prefer shorter-dated securities,” said Felipe Thut, head of fixed income at Bradesco BBI.
The high level of interest rates could also lead companies, particularly those raising funds for infrastructure projects, to initially issue shorter-term debt and subsequently replace it with longer-term transactions if conditions improve.
In the first half, the change in investor sentiment and the search for issuers with the highest credit ratings reshaped the corporate debt market. A survey by Quantum Finance for Valor shows that the number of issuers fell significantly while the average size of transactions increased.
About 70% of issuances during the period were concentrated in the first three months of the year—those that were already underway before the shock caused by Raízen and GPA, owner of the Pão de Açúcar chain, seeking out-of-court reorganization in March. And the trend, according to Samer Serhan, a partner at JiveMauá, is for the market to remain extremely selective through year-end. “We haven’t seen such a strong search for extremely high-quality assets since 2023 [the year of the Americanas crisis],” he said.
According to him, issuers with lower credit assessments have found it more difficult to access investors.
The Quantum survey shows that the number of securities fell 34.9% from January to June, while the number of issuers declined 16.9%, from 225 to 187. As a result, the average size of transactions increased 25.9% to R$436.5 million during the period.
Tax-exempt bonds on the rise
The most emblematic case was Sabesp, which raised R$14.7 billion in the first half, nearly 10% of the total volume issued. The amount was almost twice the R$7.3 billion raised by Ecovias Rio Minas, the largest issuer during the same period in 2025. In February alone, Sabesp raised R$8.58 billion in two transactions linked to the IPCA inflation index, maturing in 2038 and 2041.
The concentration among large companies was accompanied by growth in tax-incentivized debentures, which are used to finance infrastructure projects. IPCA-linked securities accounted for 44.4% of the volume issued in the first half, up from 32.7% a year earlier. In monetary terms, they grew 11%, from R$59.8 billion to R$66.5 billion, bucking the market’s contraction.
“Infrastructure transactions tend to be larger and more structured, consistent with the financing of projects that are large in scale and have long maturation periods,” Serhan said.
Debentures linked to the DI rate remained in the lead, but lost ground during the period. Their share fell from 59.3% to 51.4%, with volume declining 29%, from R$108.3 billion to R$76.9 billion. IPCA-linked issuances averaged R$679 million, nearly twice the R$343 million average for conventional transactions tied to the DI rate.
The shift is also reflected in the sectoral breakdown. Electricity, sanitation, and transportation and logistics together accounted for 62% of the volume raised in the first half. Electricity remained virtually unchanged from the previous year, at R$52.9 billion. Sanitation nearly doubled, from R$12 billion to R$23.7 billion, while transportation and logistics generated R$16.9 billion.
In the opposite direction, issuances by the financial sector fell approximately 73%, from R$39.9 billion to R$10.6 billion. The market, which in 2025 had strong combined participation from the energy and financial sectors, became more concentrated in infrastructure and regulated services.
Serhan highlights that the large number of concessions awarded in recent years, particularly in transportation and urban mobility, has created new financing needs. At the same time, the Brazilian Development Bank (BNDES) began providing a larger share of the funds allocated to projects, while some investment schedules were extended, reducing the immediate need for fundraising.
The greater selectivity is also explained by the mismatch between the rates companies are willing to accept and the returns demanded by investors. Bruno Spilberg, senior credit portfolio manager at SPX, said fund redemptions reduced their capacity to absorb new offerings. At the same time, companies began postponing transactions as buyers demanded higher premiums.
“There is demand from companies to issue, but there is no investor appetite at the rates they want,” he said. “Those who can are holding back issuances. Only the obvious names are raising funds.”
Guilherme Almeida, head of fixed income at Suno Research, noted that through February, the market had been working with a more favorable outlook for interest-rate cuts. The reversal of that expectation, the steepening of the yield curve and increased volatility prompted companies and investors to adopt greater caution.
The dispersion in rates shows the degree of selectivity. According to Almeida, top-tier infrastructure issuers were able to raise funds at rates close to IPCA plus 6.2% a year, while higher-risk transactions reached double-digit rates. Among securities linked to the DI rate, additional spreads ranged from 0.20 to 13.84 percentage points.
In July, fund flows also showed some normalization. Private-sector credit funds attracted R$14.4 billion after a string of withdrawals in the first half. Infrastructure funds, meanwhile, recorded net redemptions of R$1.6 billion, below the R$8.7 billion withdrawn in June.
Improved fund flows and the reduction in banks’ inventories are helping to reactivate issuances, but they do not yet signal a broad-based recovery. A survey by ABC Brasil of 88 investors shows that 56% expect debenture issuances linked to the CDI rate to grow by at least 10%. For incentivized debentures, 47% project an increase of that magnitude.
According to Odilon Costa, who heads the bank’s research division, the more constructive outlook is related to lower expectations for spread widening. Among incentivized debentures, 66% of respondents expect premiums to remain stable or narrow, compared with 21% in the second-quarter survey.
Despite the decline in issuances, the secondary market remains liquid. After growing 33.9% in 2025, to R$947.4 billion, trading volume increased 20.6% in the first half of this year, to R$494.6 billion, according to Quantum. In July, trading totaled R$99.5 billion, virtually unchanged from June, according to ABC Brasil. “The market is still healthy; the secondary market is turning over well,” Serhan said.
Banks expect issuances to gradually normalize during the second half as investors rebuild their portfolios and institutions resume originating transactions. Among asset managers, however, a more cautious view prevails: as long as interest rates remain high and funds have not fully recovered their fundraising capacity, the reopening is likely to remain concentrated among the highest-quality issuers.
*By Fernanda Guimarães, Rita Azevedo and Liane Thedim — São Paulo and Rio de Janeiro
TJSP rejects trade group of exporters’ claim seeking to hold 20 banks liable for R$20bn in losses by exporters
Port of Paranaguá, Paraná — Photo: Divulgacao
The 11th Chamber of the São Paulo Court of Justice (TJSP) on Thursday rejected a request by the Brazilian Foreign Trade Association (AEB) to receive nearly R$20 billion in compensation from more than 20 banks accused of participating in an alleged international foreign-exchange cartel. The decision can be appealed. AEB represents major exporters in Brazil.
The so-called “FX cartel” was uncovered in 2015 and remains under investigation by Brazil’s Administrative Council for Economic Defense (Cade), where some of the accused parties have entered into agreements. The Cade is investigating alleged manipulation of exchange rates involving foreign currencies, specifically in the spot foreign-exchange market, through advance communication on digital platforms.
According to the investigations, the operations involved coordinating currency purchases and sales between January 2008 and December 2012. In 2015, traders’ chats came to light indicating coordinated efforts to influence foreign-exchange market benchmarks.
AEB subsequently sought R$19.15 billion in compensation. The amount is based on a study by researchers at the University of Campinas (Unicamp), who estimated an exchange rate and calculated how much exporters lost between January 2010 and December 2011, arriving at a total of R$107.4 billion.
According to the claim, manufacturing companies were the most affected, followed by the extractive and agricultural products sectors. Because AEB represents nearly 20% of Brazil’s exporters, that percentage was applied to the estimated total loss, considering the period between 2010 and 2011.
AEB argued in its claim that even foreign-exchange contracts entered into by its members with other banks—which are not defendants in the case—would have suffered damages because the alleged cartel affected the platform used by all of them.
The case reached the 11th Chamber of the TJSP after AEB appealed a lower-court decision that rejected its claim. In a decision dated February 22, 2022, Judge Luiz Gustavo Esteves found that the claim could not be brought as a class action. “The interest being protected is individualized and must be assessed according to the specific circumstances of each exporter, with the association seeking only collective protection for its members,” he said.
The judge dismissed the case without ruling on its merits, finding that it concerned the specific interests of certain exporting companies, which could not be pursued through a public civil action.
The ruling issued Thursday (13) by the 11th Chamber also found that a public civil action was not appropriate because there was no common origin for the alleged damages. According to the TJSP ruling, there was no common source of harm, and each company’s situation would have to be examined individually, including how it was allegedly affected by any exchange-rate coordination—something the banks also argue would not be possible.
According to Frederico Ferreira, a partner at Bermudes Advogados who represented one of the banks in the case, the Central Bank itself had already confirmed that there had been no conduct capable of altering exchange rates in a similar lawsuit brought by Petrobras. In light of this, the court concluded that the allegation of a cartel’s existence was insufficient to support a claim for compensation.
During the hearing, Ferreira argued that if the traders had the power to change exchange rates every hour of the day for so many years, they could have used that power to resolve currency crises. Attorneys Fernando Serec of TozziniFreire and Débora Fernandes of Machado Meyer also made oral arguments, in agreement with representatives of all the banks.
Contacted by Valor, the Brazilian Foreign Trade Association (AEB) declined to comment on the decision. Citibank, Bradesco (Kirton Bank) and UBS/Credit Suisse said they would not comment on the case. BTG Pactual, Itaú BBA, Santander Brasil, Bank of America, Banco Société Générale Brasil, Morgan Stanley, Standard Chartered, Banco Bocom Bbm, Standard Chartered Bank (Brasil), MUFG Bank Ltd. (formerly The Bank of Tokyo-Mitsubishi), HSBC Bank PLC, Banco BNP Paribas Brasil, and Deutsche Bank did not immediately respond to requests for comment.
No spokespeople could be reached for Inbursa, Tokyo Mitsubishi, J.P. Morgan Chase Bank, Banco Fibra, BNC Brazil Consultoria Empresarial, or Royal Bank of Canada.
On the administrative side, the Cade’s technical staff concluded in April an investigation into cartel formation in the offshore foreign-exchange market and recommended that six financial institutions and six individuals be found liable. The case will still be sent to the agency’s tribunal for a ruling, which may uphold or overturn the technical opinion. The investigation is separate from the inquiry into Brazil’s onshore foreign-exchange market, which remains under review by Cade’s technical staff.
If the Cade issues a finding of liability, the companies involved could face fines of up to 20% of their gross revenue. Individuals found responsible for the violation could face fines of up to 20% of the amount imposed on the company.
Ibovespa and real move away from the year’s best level as election approaches and President Lula is poised to win
Gustavo Medeiros — Photo: Reprodução/Youtube
The fast-approaching election period has heightened caution toward Brazilian markets among foreign investors, who have been making sizable withdrawals from the country. Data from B3 show that in Tuesday’s session (August 11), nonresident investors withdrew R$4.7 billion from the stock market, the largest single-day outflow since April 22, 2021.
In August alone, foreign investors have already accumulated net withdrawals of R$11.9 billion from the stock market. This year, the balance of foreign funds in the local stock market peaked in April, when it showed an inflow of R$56.5 billion. Since then, outflows have totaled more than R$32 billion, reducing the accumulated positive balance in 2026 to R$24.4 billion.
At least so far, the deterioration in sentiment has shown no signs of exhaustion. Thursday (13), once again, the Ibovespa and the real ended the session lower, underperforming other comparable markets. At the close, Brazil’s benchmark stock index fell 0.23% to 167,101 points, while the dollar rose 0.25% to R$5.1925.
In the face of the recent aversion to domestic assets, the Ibovespa is now up 3.71% this year, well below the 23.3% gain recorded through mid-April. The spot dollar is now down 5.40% against the real but had fallen by nearly 11% in May.
“This is a permanent exit [by foreign investors], or at least until the election is over, is the following day. Stocks and the dollar seem to have shifted to a different level and won’t return in the short term. It seems there is no longer the seller from yesterday [Tuesday], but there is also no buyer at better prices. That is the feeling looking at prices today [Thursday],” said Ivo Chermont, chief economist at Quantitas.
One of the firms to recently change its asset allocation was Sycamore Capital, which has $180 million under management and reduced its exposure to Brazilian stocks from 5% to close to zero in client portfolios, according to Jean Van de Walle, the wealth manager’s investment director.
One factor behind the decision was the high probability of President Luiz Inácio Lula da Silva (Workers’ Party, PT) winning, Walle said. “My investment thesis was based on Lula’s defeat and Brazil joining a movement toward reforms more favorable to private-sector investment.”
Persistent inflation and the political clash between the local administration and Donald Trump were additional reasons for the change. Following the adjustments, the executive said he now holds only small positions in Vale and Petrobras.
In the foreign-exchange market, the foreign investor’s moves on Monday and Tuesday may have encouraged local funds’ activity on Wednesday, when they bought $1.3 billion, according to B3 data on the derivatives market cited by currency traders and fund managers.
Although the data contain some “noise,” because they classify local funds operated from abroad as nonresident transactions, the indicator provides guidance to market participants. In April this year, the bet in favor of the real had approached a record level, surpassing the $12 billion threshold. Since then, that position has declined sharply and, according to market participants, the net position is now short the dollar against the real by only $600 million.
If pessimism persists, the net short-dollar position could become a long position in the U.S. currency, something that has not occurred since June 2, 2025, traders said.
Jorge Dib, a portfolio manager at Galapagos Capital, notes that it is difficult to determine the true price-setter in the foreign-exchange market but says that when looking at the firm’s model for the real’s movement against other currencies, it is possible to see that politics is on the radar. “It seems to me that there is an increase in volatility because of the election, and if you look at the history of other election years, we will see that this is common.”
The executive explains that in the “carry-to-vol” strategy, volatility carries significant weight, so investors who had been pursuing this type of trade in Brazil because of high interest rates may reduce their exposure as fluctuations increase. “Given the calendar, with a ‘deadline’ for the formal registration of candidates, an increase in volatility is to be expected because the election period is effectively beginning,” he said.
In Dib’s view, even if volatility increases over the coming months, if the external environment remains favorable to carry trades and interest rates remain high in Brazil, the domestic currency is likely to regain ground in the post-election period.
“This is even with the more adverse seasonal flow, because if the real becomes more depreciated than its peers and external tailwinds are favorable, an opportunity opens up because interest rates will still be high and volatility will fall again. In other words, the carry trade becomes attractive again.”
Although he attributes the greater volatility to the election scenario, the Galapagos manager says foreign withdrawals from Brazil are not driven by this factor, but rather by the global context.
This line of reasoning is shared by Gustavo Medeiros, global head of macroeconomic research at Ashmore. In his view, foreign capital withdrawals from the local stock market appear to be more technical than directly related to the election or a rotation into other emerging markets. The Ashmore executive explains that foreign flows into emerging markets have been negative in 2026, mainly because of heavy outflows from Taiwan and South Korea following strong gains in those countries’ stock markets, a move he considers “very likely a portfolio rebalancing.”
Although he does not see the approaching election as a driver of stock-market outflows, Medeiros said he is cautious about Brazil’s contest in a scenario in which, according to him, “fiscal risk is still not priced in.”
During the session, interest-rate futures initially appeared set to decline across the yield curve, but short- and medium-term rates ended more stable, while long-term rates rose, affected by other domestic markets. The DI rate maturing in January 2027 ended unchanged at 13.75%, while the DI rate for January 2031 rose from 14.455% to 14.53%.
*By Arthur Cagliari, Bruna Furlani, Maria Fernanda Salinet and Gabriel Caldeira — São Paulo
Beijing files document with the body, saying it “has a substantial commercial interest” in Brazilian tariff consultations
WTO headquarters in Geneva — Photo: Andreas Bastian/DPA/AP Images
The U.S. responded on Monday (10) to Brazil’s request for consultations at the World Trade Organization (WTO) to discuss the two tariffs imposed on Brazilian products imported by the country. In a document sent to the body, the U.S. stated that it “accepts Brazil’s request to initiate consultations” and that its representatives are “available to talk with representatives of your mission on a date convenient to both parties for holding the consultations.”
Also on Monday, China requested to take part in the tariff discussion between the U.S. and Brazil, stating that it “has a substantial commercial interest in these consultations.”
In the document, the country says the measures could also affect Chinese exports, since the discussions could affect the competitive conditions for its products in the U.S. market.
“China therefore respectfully requests that it be allowed to participate in the consultations in this dispute,” reads an excerpt from another document linked to the discussion.
The U.S. statement submitted on Monday responds to the complaint filed by Brazil with the WTO, formalized at the end of last month by the Ministry of Foreign Affairs through Brazil’s Permanent Mission to the WTO, in Geneva.
On July 27, Brazil stated that the measures adopted by the U.S. violated commitments made by the country under the multilateral trading system and represent an attempt to impose sanctions unilaterally.
The initiative challenges the two surtaxes announced last month by the Office of the U.S. Trade Representative (USTR), both based on Section 301 of U.S. trade law: the first, an additional 25% tariff related to the investigation into Brazilian trade practices.
The second is the 12.5% tariff linked to the inquiry into Brazil’s alleged failures to curb the exports of products made with forced labor. Combined, the measures raise taxation on a portion of Brazilian products exported to the U.S. market.
In the statement sent to the WTO, Brazil argues that Washington disregarded the most-favored-nation principle, one of the pillars of international trade, by applying specific tariffs against Brazilian products without extending the same treatment to other members of the organization.
It also contends that the U.S. began charging tariffs above the limits bound with the WTO. Another point of the complaint is the allegation that the U.S. resorted to unilateral measures to respond to alleged trade violations, instead of using the dispute settlement mechanism provided for by the organization itself.
“The U.S. is acting inconsistently with Article 23.1 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) by seeking to redress alleged violations of obligations, or other nullification or impairment of benefits under the covered agreements, or impediments to the attainment of the objectives of those agreements, through unilateral determinations and the imposition of tariffs, rather than having recourse to and abiding by the rules and procedures set out in the DSU,” reads an excerpt from the statement.
The document also recounts the history of the trade dispute between the two countries. Brazil notes that, since February 2025, the U.S. has been adopting successive additional tariffs against trading partners under various justifications.
/i.s3.glbimg.com/v1/AUTH_63b422c2caee4269b8b34177e8876b93/internal_photos/bs/2026/1/h/NkAl8rRLO2gafv22IBhw/capturar.png)
/i.s3.glbimg.com/v1/AUTH_37554604729d4b2f9f3eb9ad8a691345/internal_photos/bs/2025/w/M/VOOF5ATxqajLA5ICEfMQ/foto28emp-101-marche-b13.jpg)
/i.s3.glbimg.com/v1/AUTH_37554604729d4b2f9f3eb9ad8a691345/internal_photos/bs/2026/e/x/kcGmg9Tm66XUT4CsABZg/foto18agr-101-chinacarne-b10.jpg)
/i.s3.glbimg.com/v1/AUTH_63b422c2caee4269b8b34177e8876b93/internal_photos/bs/2026/n/B/AF7YIRQeWZWRsl85hiHA/foto18fin-101-dividendo-c1.jpg)
/i.s3.glbimg.com/v1/AUTH_63b422c2caee4269b8b34177e8876b93/internal_photos/bs/2026/j/B/lgJ0EhT2SV5KskBxLCow/foto18emp-101-petrobras-b7.jpg)
/i.s3.glbimg.com/v1/AUTH_63b422c2caee4269b8b34177e8876b93/internal_photos/bs/2026/U/S/gvFI2SQ2CIKbBowXiQ1A/foto17fin-101-divida-c1.jpg)
/i.s3.glbimg.com/v1/AUTH_37554604729d4b2f9f3eb9ad8a691345/internal_photos/bs/2026/S/G/VWVyeUQ0eiF7suFSv0ZQ/042-portodeparanagua-foto-divulgacao.jpg)
/i.s3.glbimg.com/v1/AUTH_37554604729d4b2f9f3eb9ad8a691345/internal_photos/bs/2024/i/g/Jsy9ahRFa8mJLT8MvAQQ/gustavo-20medeiros.jpg)
/i.s3.glbimg.com/v1/AUTH_63b422c2caee4269b8b34177e8876b93/internal_photos/bs/2026/h/d/fi4AiERLyNqoBHsz6lJg/foto11bra-101-euachina-a6.jpg)