Experts concerned about plan to mitigate fuel price hikes

Due to its dependence on proceedings in Congress, there are still doubts about the extent of measure, experts say

The supplementary bill (PLP) that allows the federal government to use extra oil revenues to offset tax reductions on fuel could effectively prevent larger price hikes during periods of high volatility, experts in the sector say. However, since it depends on the National Congress, there are still doubts about the measure’s extent.

If approved, the PLP grants the government flexibility by permitting the offset of potential revenue losses—due to tax reductions—with increased revenue resulting from oil price shocks. The Fiscal Responsibility Law (LRF) requires tax cuts to be compensated by increases in other taxes. Since the beginning of the war, Brent crude oil has risen from a range of $65 to fluctuating between $95 and over $100 per barrel.

However, economists view the measure with reservations, considering it negative for the fiscal scenario and with uncertain impacts on inflation.

According to the PLP, revenue waivers can be applied to diesel, biodiesel, gasoline, and ethanol. Until now, the government has implemented measures to prevent price increases in diesel, biodiesel, and aviation kerosene (QAV). However, gasoline and ethanol have yet to have PIS/Cofins cut to zero.

“We always view favorably measures that can be taken to lower product prices,” said James Thorp Neto, president of the National Federation of Fuel and Lubricant Trade (Fecombustíveis).

Among the federal government’s revenue sources in the oil and gas sector are royalties, special participation (on large fields), dividends, sales of oil from production-sharing in the pre-salt, and signature bonuses in area auctions.

In the case of royalties, the National Agency of Petroleum, Natural Gas and Biofuels (ANP) estimates revenue of R$89.61 billion in 2026, considering a Brent barrel price of $95.64. Of this total, the federal government is expected to retain R$36.07 billion.

This year, the ANP is expected to conduct an auction for the concession of 495 onshore and offshore oil and gas blocks. The highest bid for the signature bonus wins.

Another revenue source is the sale of pre-salt oil. Between 2018 and 2025, the federal government raised R$43.75 billion, according to Pré-Sal Petróleo (PPSA), which manages production-sharing contracts. The state-owned company estimates revenue of R$24.14 billion in 2026 from pre-salt oil sales from past and upcoming auctions this year.

PPSA is expected to auction 106.5 million barrels from six pre-salt areas in July. The expectation is that most of the load will be delivered in 2027, except for the Bacalhau field, which may occur in August this year—payments are made upon oil delivery.

According to an industry source, if the government’s proposal is approved, it will have more effects downstream but is not expected to affect oil and fuel producers. The industry’s main concern, the source says, is the inclusion of the oil export tax in this equation. The tax is under judicial discussion between foreign oil companies and the government.

“There’s no need to include an additional tax [the export tax]. Revenue from royalties and special participation is sufficient to offset tax exemptions. The export tax has a clear revenue-raising objective, which should not happen.”

Former ANP director and consultant David Zylberstajn believes the uncertainty regarding compensation lies in the National Congress’s receptivity to the measure. “In my opinion, the big question mark is what kind of amendments or discussions might arise,” he said.

He emphasizes that diesel is used in agribusiness, freight, and passenger transport. Meanwhile, there are alternatives to gasoline that can reduce price pressures for the end consumer, which is not the case with diesel, Zylberstajn noted.

Evaristo Pinheiro, president of Refina Brasil, an association of private refineries, highlighted that the measures do not directly impact refineries, but the entity has been urging the government to reduce to zero PIS/Cofins for crude oil used in refining, as it did with diesel. According to him, when oil products have taxes cut to zero and crude oil does not, there is an accumulation of tax credits.

“If I can’t pass on a higher price, I’m forced to reduce production,” said Pinheiro. According to him, private refineries accumulate R$50 million per month in tax credits on diesel and jet fuel (QAV). The amount could exceed R$230 million per month if gasoline is exempt from PIS/Cofins.

*By Fábio Couto and Kariny Leal — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/

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Brazilian families’ spare income falls to lowest since 2011

Higher debt costs squeeze disposable income even as strong labor market lifts wages, according to Tendências

 

 

 

Brazilian families have had less money left at the end of the month to spend on consumption beyond basic items and the payment of taxes and debt. That may help explain voters’ discomfort with the economic outlook and the worsening approval ratings for the federal government, despite strong employment and labor income in the country. The issue has also moved onto the radar of presidential campaigns.

Household disposable income after spending on essential items, taxes, and debt service is at its lowest level since 2011, when the series compiled by Tendências Consultoria begins.

In February, the amount “left over” from households’ broader income mass after covering those expenses was 21%, the consultancy said. At the start of 2024, it was 23.6%. That is a very significant deterioration in a short period, said Alessandra Ribeiro, partner and director of macroeconomics and sector analysis. The indicator peaked in March 2011, at 27.2%, and again in June 2020, at 27%.

The indicator starts with households’ broader income mass, which includes wages as well as other sources such as pensions, social benefits, rent, and dividends. From that total, Tendências deducts inflation on essential items in housing, including rent and fees, fuels and energy such as cooking gas and electricity bills; transportation, including public transport and vehicle fuel; health and personal care, including pharmaceutical and optical products and health services; communications; education; and food consumed at home. The calculation considers the changes and weights of the IPCA, Brazil’s benchmark inflation index.

It also deducts interest and principal payments on debt, based on the average of credit lines tracked by the Central Bank. But Tendências makes adjustments, including classifying credit-card installment purchases as credit. Finally, data from the Federal Revenue Service are used to deduct income tax and social security contributions. “It is an indicator of what is left for other types of consumption,” Ribeiro said.

The sharp decline in disposable income, especially since 2025, has been driven by higher debt-service costs, she said. “We see a very significant increase in how much credit payments are eating into income, while food, which has a very relevant weight, alleviated inflation a lot in 2025,” she said.

In 2025, the price of food consumed at home rose 1.43%, while headline inflation was 4.26%. In the 12 months through March 2026, food consumed at home rose 0.53%, compared with a 4.14% increase in the IPCA.

Higher rates

The backdrop for the heavier debt burden in household budgets is interest rates, Ribeiro said. “It is a scenario of high interest rates for a long time,” she said. “Throughout 2025, we saw a clear deterioration in the quality of household credit portfolios, with families turning more to emergency credit lines such as revolving credit cards and overdrafts. When people move into those lines, they pay higher interest rates.”

That is compounded by tighter credit supply, as banks have also become more cautious amid rising delinquency. “With this combination, even a strong labor market has not been enough to offset this financial burden.”

Household debt was close to half, 49.7%, of Gross National Disposable Income in January this year, noted Marcelo Gazzano, an economist at Bradesco. The figure is low compared with other countries, he said, since household credit in Brazil as a share of GDP is about 10 percentage points below the average for emerging economies, based on data from the Bank for International Settlements (BIS). Still, Brazilian household debt is almost twice the level seen in 2007, he noted.

Bradesco estimates that, all else being equal, a 1% increase in the stock of household credit also raises the share of income committed to debt payments by 1%.

Over the past two years, household debt has increased by 2 percentage points, with half of that growth explained by the expansion of non-payroll-deductible personal credit, Gazzano said.

Vehicle financing also increased and now accounts for almost 6% of household income. Payroll-deductible loans for private-sector workers, boosted in 2025, represented 1.2% of income in January 2026, Gazzano said.

He also noted that the Central Bank’s Credit Cost Indicator reached 37.5% a year in February, the highest rate since 2013. That rate is about 4.5 percentage points higher than at the end of 2024, Gazzano said.

Political campaigns

Ultimately, Tendências’ disposable-income indicator is a measure of well-being that helps explain other developments, such as the worsening evaluation of the government despite a dynamic labor market and a strong increase in income mass, Ribeiro said. “We can understand where this discomfort is coming from.”

Part of the movement is also related to the large-scale entry of more low-income families into the banking system, driven by the pandemic and by innovations such as Pix, Brazil’s instant-payment system, and fintechs.

“We are still thinking about how to measure this type of effect, which obviously has a positive side. But our assessment is that the problem of high debt is indeed being amplified by this rapid inclusion of households without a foundation in financial education,” she said.

Household debt and the perception that purchasing power has fallen over the past year have taken on a central role in shaping the pre-presidential campaign strategies of President Luiz Inácio Lula da Silva, of the Workers’ Party, and Senator Flávio Bolsonaro, of the Liberal Party of Rio de Janeiro. Flávio–son of former President Jair Bolsonaro–has been using the higher cost of living to appeal to undecided voters.

The government is preparing a new program to refinance debts at lower costs, a kind of “Desenrola 2.0,” which could bring some short-term relief, Ribeiro said. In her view, the initiative makes sense in a context of high delinquency and given the availability of resources in the Operations Guarantee Fund (FGO), although it needs greater alignment with banks than the first version did so that renegotiation mechanisms are truly effective.

“But it is a completely short-term solution. It will not resolve the dynamics over time when we think about the inclusion of low-income people in the banking system unless it comes with a more structural financial-education agenda,” Ribeiro said. “The risk is having to do another program again soon,” she said.

Fiscal concerns

In structural terms, Brazil also needs to resolve its systematic problem of high interest rates, especially to navigate shocks such as the war in the Middle East with more room to maneuver, Ribeiro noted. “We now face the risk that interest rates will stay higher than we had imagined, given the effects of the conflict. This situation for families should remain tight for some time.”

Brazil’s structural problem of high interest rates, in turn, is linked to the fiscal issue. Ribeiro said. In her view, it is important that, starting in 2027, reforms are advanced to improve the dynamics of mandatory spending, while the country continues to close loopholes that lead to revenue losses, such as tax expenditures. “The efficiency of many of those lines is questionable,” Ribeiro said.

If Brazil can send some signal from next year onward that debt dynamics will be stable through 2030, it will already be possible to reduce the risk premium charged to the country, which would have a benign effect on financial variables and the base rate Selic, she said.

Bradesco estimates that a 100-basis-point decline in the Selic reduces the Credit Cost Indicator by 50 bp and the amount spent on debt by 1% over a six-month period, Gazzano said.

*By Anaïs Fernandes — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Central Bank set to cut Selic by 25bp amid war fears

Most market participants expect Brazil’s Monetary Policy Committee to lower base rate to 14.5%, while signaling caution on inflation risks

 

 

With the Selic base rate deep in contractionary territory, but against a backdrop of high uncertainty and inflationary pressure from the war in the Middle East, the Central Bank’s Monetary Policy Committee (COPOM) is expected to repeat its latest decision and cut the benchmark interest rate by another 25 basis points, to 14.5%, at the meeting that ends Wednesday (29).

That is the expectation of the vast majority of the 122 market participants, including banks, asset managers, and consultancies, surveyed by Valor less than a week before the committee’s next decision.

In all, 114 firms expect the Selic to end this month at 14.5%, while five expect rates to remain at the current level and only two believe a larger, 50-basis-point cut would be more appropriate.

With no signs that the war involving the United States, Israel, Iran, and Lebanon will end soon, oil prices have remained around $100 a barrel for most of the period since COPOM’s last meeting, on March 18.

As a result, the market’s inflation outlook has worsened, and the Central Bank’s Focus survey now points to the IPCA, Brazil’s benchmark inflation index, above the upper limit of the target range in 2026 and, for next year, inflation well above the 3% pursued by the monetary authority.

Even so, the near-unanimous expectation is that COPOM still has room to “calibrate” the degree of monetary tightening, as the committee puts it, since the current Selic level is significantly weighing on economic activity.

Speeding up cuts

Morgan Stanley’s chief Brazil economist, Ana Madeira, maintains a more dovish view than the market consensus. She expects the Central Bank to cut the Selic by 25 basis points this week, but says it could speed up the pace in June and take the benchmark rate to 12% by the end of the year.

That view was formed after observing that, despite the volatility that followed the outbreak of the Middle East conflict, the Central Bank continued to signal that it intended to keep cutting rates and planned to calibrate rates that, by the end of the cycle, would remain restrictive.

“This expectation is based, in part, on some improvement in the external scenario, especially in oil prices. But, of course, if there is no easing on the geopolitical front and oil remains under pressure, we acknowledge it will be difficult for the Central Bank to have a solid enough argument to explain an acceleration in the pace of cuts,” she said.

For Madeira, however, the slowdown in the economy continues to point to the need to calibrate the degree of restrictiveness in monetary policy.

“An acceleration to 50 basis points depends on the international scenario, but the 25-basis-point pace can continue, especially when we look at the domestic backdrop,” Madeira said, even though she sees the inflation outlook as a concern.

Morgan Stanley raised its IPCA forecast for this year to 4.5% from 3.9% and kept its 2027 estimate at 3.6%.

As for communication, Madeira believes Wednesday’s decision is likely to resemble the statement issued in March in tone. Some changes, however, are expected, particularly in the balance of risks. She expects the balance to become asymmetric, with upside risks to inflation.

“But in terms of guidance, I believe the Central Bank will continue to suggest that calibration should continue ahead, without committing to any pace of cuts.”

Key communication

Amid the uncertainty created by the war, COPOM’s communication will be crucial to understanding its next steps, said Fabiano Soares dos Santos, investment director at Funpresp, Brazil’s pension fund for federal civil servants.

“We know market volatility has increased a lot and that, in March, at the COPOM meeting, the conflict in the Middle East was still very recent and there was still no measure of the impacts. Looking at it now, the Central Bank still does not have the necessary requirements to change monetary policy, and the market still believes in the downward trend for the Selic, even though there is more uncertainty,” Soares said. He expects a 25-basis-point cut this week and a Selic of 12.5% at the end of 2026.

Luis Cezario, chief economist at Asset 1, does not expect significant changes in COPOM’s communication. Even on the balance of risks, while he sees some upside asymmetry in the inflation outlook today, he said it is unclear whether the committee will have enough consensus to change its assessment from “symmetric.”

In any case, Cezario is aligned with the market consensus in seeing a 25-basis-point Selic cut as the most likely decision, without a clear indication of what COPOM will do next. “My impression is that the tone will remain similar to the previous statement: it will signal that there is room to keep cutting, but avoid giving clear guidance on the pace,” he said.

He highlighted remarks by COPOM members suggesting there is some “cushion” in interest rates after the tightening process that took the Selic to 15% last year.

“It seems to us that, to signal any move toward stopping the cycle, there would need to be a very sharp deterioration in the scenario,” Cezario said. “They have a budget for cuts, smaller than before, but there is still some room,” added the economist, who expects the Selic to end this year at 12.5%.

Slower path

With a more conservative view, Daniel Xavier, chief economist at Banco ABC Brasil, expects COPOM to keep cutting the Selic by 25 basis points until the end of 2026, which would take the benchmark rate to 13.25%, slightly above the market’s median forecast of 13%.

“It will deliver the 25-basis-point [cut], reaffirm that it is watching the conflict and its effects, while reinforcing that it is coming from a long period of restrictive rates. It will be the continuation of the cycle in a cautious and serene way,” Xavier said, repeating terms used by COPOM itself in the statement after its March decision.

The economist expects COPOM to keep the balance of risks symmetric, because he believes it would be “contradictory” to cut rates while flagging upside risks to inflation. He also expects the inflation forecast for the relevant monetary-policy horizon to be reduced to 3.1% from 3.3%.

Xavier said the shift in the horizon from the third to the fourth quarter of 2027, the recent appreciation of the real, and a higher Selic projected in the Focus survey will be enough to offset the impact of higher oil prices on the Central Bank’s model forecast.

Asset 1’s calculation points to a different result, Cezario said. “Our forecast is between 3.3% and 3.4%. Since there will probably be a further worsening in inflation expectations on Monday [27], it seems more likely to us that the projection will rise to 3.4%,” he said.

Gino Olivares, chief economist at Azimut Brasil Wealth Management, challenges the idea that the Selic has a cushion that allows the Central Bank to keep cutting in light of the change in the inflation outlook after the outbreak of the war.

“What I see now is that the plane is not landing, but going around. At this point, there is no way to know how high the plane will climb in that go-around. So neither I nor the Central Bank know how much of the room that existed to lower interest rates remained after this move,” he said.

Olivares acknowledges, however, that continuing the rate-cutting cycle at a 25-basis-point pace or pausing while waiting for more information are strategies with similar effects, since the current level of monetary-policy restriction is high.

The economist draws attention to the fact that inflation is likely to keep rising over the next three months. And while current inflation rises, expectations are unlikely to fall. “We will live with inflation under pressure, and it will only ease with numbers well below expectations, which should not happen anytime soon.”

Potential pause

For COPOM, the path of least resistance, Olivares said, should be to keep cutting rates, but with a message that the possibility of a pause has become real. “The chance of stopping is real. It is definitely not zero. Perhaps that is the most important message Copom COPOM to convey, and the hardest one to put into words,” he noted.

For Société Générale economists, that should in fact be the baseline scenario. Given uncertainty in the Middle East, rising inflation expectations, and mixed signals from the domestic economy, COPOM should keep the Selic at 14.75% on Wednesday, the French bank argued in a report.

“Risks remain tilted toward lower rates in the short term and higher rates in the medium term. In the short term, the Central Bank may feel compelled to take advantage of still-moderate inflation levels, especially considering that real rates would remain significantly restrictive even with a few cuts. Beyond the short term, however, with inflation expectations for this year already above the target ceiling, any additional deviation, especially in 2027, could restrict the easing path,” the bank’s economists wrote.

*By Gabriel Caldeira, Victor Rezende and Gabriel Roca — São Paulo

Source: Valoar International

https://valorinternational.globo.com/

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STJ: Publicar balanço não é requisito para arquivar atos de limitadas

Decisão da 4ª turma da Corte da Cidadania se baseou na lei 11.638/07, que não prevê tal obrigação.

22 de abril de 2026
A 4ª turma do STJ entendeu que juntas comerciais não podem exigir a publicação prévia de balanços e demonstrações financeiras como requisito para o arquivamento de atos societários de sociedades limitadas de grande porte.

O colegiado analisou recurso do MPF contra decisão do TRF da 3ª região, que havia afastado exigência imposta pela Jucesp – Junta Comercial de São Paulo.

No caso, uma empresa buscou garantir o registro de atas de reuniões de sócios sem a necessidade de divulgar previamente suas informações financeiras em Diário Oficial e jornal de grande circulação.

(Imagem: Freepik)

4ª turma do STJ vedou publicação de registro de balanço como requisito para arquivar atos de limitadas de grande porte.(Imagem: Freepik)

 

Limite da lei

Relator do recurso, ministro Antonio Carlos Ferreira destacou que a lei 11.638/07 determina que sociedades limitadas de grande porte sigam regras das sociedades anônimas apenas quanto à escrituração, elaboração de demonstrações financeiras e auditoria independente.

Segundo o ministro, a ausência de menção à obrigação de publicação não é acidental. Para ele, o legislador optou por não impor essa exigência, e não cabe à administração suprir essa lacuna por interpretação ampliativa.

O relator também ressaltou que a divulgação pública de dados contábeis pode expor informações estratégicas das empresas, o que reforça a necessidade de previsão legal expressa para tal obrigação.

Nesse contexto, afirmou que atos administrativos não podem criar exigências não previstas em lei, sob pena de violação ao princípio da legalidade e à liberdade de iniciativa.

Para o ministro, a imposição feita pela junta comercial representou extrapolação do poder regulamentar.

Com esse entendimento, a 4ª turma manteve a decisão que afastou a exigência de publicação, permitindo o arquivamento dos atos societários sem a comprovação prévia da divulgação dos balanços.

Processo: REsp 2.002.734

Fonte: https://www.migalhas.com.br/quentes/454232/stj-publicar-balanco-nao-e-requisito-para-arquivar-atos-de-limitadas

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U.S. deal for Brazil rare earth mine signals strategic supply push

Acquisition of Serra Verde highlights global scramble to secure critical minerals beyond China

 

 

 

Serra Verde, in Minaçu (Goiás), is the only one in Brazil with an operating mine — Foto: Divulgação/Serra Verde
Serra Verde, in Minaçu (Goiás), is the only one in Brazil with an operating mine — Photo: Divulgação/Serra Verde

The acquisition of the only rare earth mining company in commercial operation in Brazil by a U.S. firm has raised concerns in the country and underscores Washington’s push to build an independent supply chain for these elements. Rare earth minerals are critical for the energy transition and defense industries, yet global supply remains heavily dependent on China.

USA Rare Earth announced on Monday (20) that it will pay $300 million in cash and issue about 126.8 million shares to acquire Serra Verde, which operates in Minaçu, Goiás. The transaction, valued at $2.8 billion, is expected to close in the third quarter, the U.S. company said. Serra Verde’s current owners—Denham Capital, Energy and Minerals Group, and Vision Blue—will become the largest shareholders in the combined entity, holding a 34% stake

The U.S. company, which has a mineral deposit in Texas but no operating mines, has already secured a commitment of up to $1.6 billion in financial support from the U.S. government.

Washington had already been involved in Serra Verde before the acquisition, having arranged $565 million (R$2.9 billion) in financing for the miner through the U.S. International Development Finance Corporation (DFC).

The deal highlights growing interest in Brazil’s rare earth reserves—the largest outside China—amid what analysts describe as a “silent war” between the U.S. and China for control over strategic supply chains, said Elaine Santos, a researcher at Portugal’s National Laboratory of Energy and Geology (LNEG).

“This is not just a corporate acquisition. It is also a strategic move to secure supply chains. The U.S. has a clear plan and is implementing it to regain control over chains it outsourced in recent decades,” she said.

According to Santos, the transaction could attract capital to other projects by positioning Brazil as an investment destination. “But the country is effectively handing over what may be its only producer of heavy rare earths outside Asia to a U.S. company,” she added.

Combined with financing commitments, planned investments, and agreements signed by other rare earth projects still in pre-operational stages with U.S. and international partners, the deal suggests that international cooperation is advancing independently of formal policies or agreements led by Brazil. “In practice, developments are already moving ahead differently,” she said.

Sources involved in pre-operational projects told Valor that the acquisition could trigger reactions from the Brazilian government and strengthen calls for the creation of Terrabras, a proposed state-owned company focused on the rare earth supply chain. They oppose the proposal, arguing it could worsen Brazil’s attractiveness to investors.

“Committing 100% of production to the U.S. for 15 years without bringing investment is exactly what Lula does not want,” said one source, referring to Serra Verde’s supply agreement with a special-purpose vehicle backed by U.S. government agencies and private investors. The source, however, defended the mining company’s decision. “If no other path was viable, it is a transaction like any other—there is no reason to criticize it.”

For the Critical Minerals Association (AMC), the U.S. strategy to secure supply has been “pragmatic” in overcoming the absence of bilateral agreements. “They are showing that if they cannot achieve it through government-level agreements, they will pursue it through state-backed initiatives, as seen in Goiás and in direct negotiations with companies,” said Marisa César, chair of the association.

(Cibelle Bouças contributed reporting in Belo Horizonte)

*By Michael Esquer — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Former BRB chief tied to alleged fraud benefiting Banco Master

Lawsuit cites irregular capital increases, links to distressed asset deals under investigation

 

 

 

Messages sent by Paulo Henrique Costa, former president of Banco de Brasília (BRB), indicate he may have acted improperly to benefit Daniel Vorcaro’s Banco Master by allowing capital increases that enabled the purchase of loan portfolios from the bank. The conclusion is part of a lawsuit filed by BRB on February 23 against Banco Master, Vorcaro, João Carlos Mansur, of Reag, and investment funds.

The filing points to signs of fraud, including “corporate restructuring, rapid shifts in shareholdings, and risk of asset dissipation by third parties directly or indirectly involved in Operation Compliance Zero.” It also states that BRB acquired R$26 billion in credit portfolios from Banco Master and Will Bank between July 2024 and October 2025.

The lawsuit alleges “serious irregularities in these transactions,” including approximately R$13 billion in distressed securities originated by Tirreno. It seeks to freeze BRB shares held by defendants linked to Banco Master.

Messages attributed to Costa suggest he personally selected three funds linked to Master and Reag to participate in capital injections into BRB. “It will be split into three vehicles. Please proceed with a new [subscription] of R$250 million,” one message reads.

The exchange refers to BRB’s capital increase carried out in May 2024, when the bank raised R$290 million from private investors connected to funds within the Master/Reag ecosystem, under Costa’s direct oversight.

According to the lawsuit, these actions enabled investors tied to Banco Master or mentioned in investigations to hold approximately 23.5% of BRB’s share capital by the end of 2025.

“Through capital increases carried out irregularly—featuring participation by parties that were not shareholders at the record date and involving triangulated share transactions—particularly to facilitate the acquisition of Banco Master’s credit portfolios, approximately 23.5% of BRB shares were acquired by individuals and entities with direct or indirect ties to the Master/Reag ecosystem,” the filing states.

“The funds in question ultimately have beneficiaries linked to the Master/Reag ecosystem, which justifies freezing these holdings to enable potential compensation to BRB for damages caused by the alleged fraud,” it adds.

The lawsuit further argues that funds linked to Banco Master should not have participated directly in the capital increase because they were not part of BRB’s shareholder base at the relevant record date. “Under the rules governing private capital increases, only shareholders as of May 17, 2024—the record date—were entitled to exercise preemptive rights and participate in subsequent rounds,” the filing states.

Costa was arrested last week during the fourth phase of Operation Compliance Zero. According to the Federal Police, there is evidence that he received bribes to facilitate fraudulent transactions involving Banco Master.

Investigators allege he was to receive six properties valued at R$146 million. These payments were allegedly halted after Vorcaro was improperly informed about confidential investigations involving Banco Master. Even so, authorities traced payments to Costa exceeding R$74 million.

Brazil’s Federal Supreme Court (STF) Second Panel began reviewing on Wednesday a decision by Justice André Mendonça ordering Costa’s arrest. During the same phase of Operation Compliance Zero, lawyer Daniel Monteiro—who acted on behalf of Banco Master—was also detained.

Valor contacted Costa’s legal defense, but no response was provided by the time of publication.

  • By Tiago Angelo, Valor — Brasília
  • Source: Valor International
  • https://valorinternational.globo.com/
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Companies delay local bond deals as demand weakens

High rates, war and a growing number of corporate restructurings are making investors more cautious, leading firms to shelve fixed-income offerings

 

 

 

Brazilian companies are postponing local bond deals, including financial bills and debentures, as investors grow more risk-averse. Concerns that interest rates will remain high for longer, combined with global inflation pressures linked to the war in Iran and a fresh wave of corporate restructurings, have heightened caution.

As a result, companies have chosen to shelve planned issuances for now due to weak demand, people familiar with the matter said.

At home, rising corporate leverage has become a growing concern. Investors fear that more companies could join the list of distressed borrowers, which has expanded in recent weeks, prompting closer scrutiny across the market.

More recently, delays in the release of financial statements by sanitation company Aegea further dented sentiment. Investors are increasingly stepping back from private credit or waiting for better market conditions before committing new capital.

The risk-off mood has also affected financial bills issuance. RCI Brasil, the local financing arm of Renault Group, postponed a fundraising citing “current market conditions,” while automaker Stellantis delayed closing its own deal. The impact has extended to direct-lending funds, known in Brazil as FIDCs.

According to asset managers and banking executives, part of the capital is being redirected toward safer instruments, such as certificates of deposit issued by large banks and backed by the Credit Guarantee Fund.

Other investors are simply holding cash, waiting for clearer visibility before reallocating funds.

One senior fixed-income banker said spreads in private credit deals had been below what he described as a “natural level,” reflecting strong demand at a time when funds were still deploying earlier inflows.

In recent weeks, however, many transactions have triggered so-called “market flex” clauses, which allow banks to adjust terms such as pricing or maturities in response to significant changes in market conditions. That was the case with deals by mobility infrastructure company Motiva and Minas Gerais power utility Cemig, sources familiar with the transactions said. Cemig ultimately raised R$1.15 billion, roughly half of the initially planned amount.

“Activating this type of clause is not common. It gives banks the right to adjust terms, such as tenor or pricing, in response to extreme events,” said Gustavo Rugani, a partner in capital markets at TozziniFreire.

A banking executive said the use of such clauses reflects the fact that many deals brought to market this month were structured earlier this year, when sentiment was more optimistic and expectations pointed to sharper cuts in the Selic base rate.

Unsold bonds

Given the current backdrop, some companies have opted to wait for improved conditions and withdrawn offerings altogether, another market participant said. “For some, it now makes more sense to rely on bank financing,” the person said.

A further deterrent has been the fact that many recent deals—such as a R$1.56 billion issuance by fuel distributor Vibra—ended up being largely taken onto banks’ balance sheets. In Brazil, underwriters typically provide firm underwriting, meaning they absorb any unsold bonds.

“Banks ended up holding more securities than they wanted and now have less room and appetite, which also helps explain the slowdown in issuance,” another banking executive said.

According to this source, the reopening of dollar-denominated issuance for Brazilian companies has also led larger issuers to consider tapping international markets instead of raising funds locally.

Market mood

Pedro Breviglieri, a credit manager at Reach, said the environment remains highly fluid, making it difficult to determine whether the recent widening in spreads will persist. He noted that an end to the war in Iran could help clarify the outlook.

One issue being closely watched is whether the slowdown in primary issuance could lead to a shortage of assets for fund managers to allocate. “If that happens, we could see a shift toward the secondary market, which would also affect spread dynamics,” he said.

Breviglieri said the current environment differs from 2023, when Brazil’s private credit market was last shaken. At that time, unexpected events such as the accounting scandal at retailer Americanas undermined investor confidence. Now, stress appears more concentrated among companies struggling to deleverage in a high-rate outlook.

Fabio Jacob, head of local debt at Scotiabank, said the situation is far from comparable to 2023 “because there is no concern about systemic risk.” Companies that can afford to wait are likely to delay issuance until conditions improve, he said. “It takes time to unlock the market. Since March, many bonds have remained on banks’ balance sheets, and we need to wait until that inventory is gradually distributed.”

Structural demand

Despite the current challenges, the outlook for Brazil’s private credit market remains broadly positive, according to Luis Sales, head of products at Banco Fator.

“The market remains strong and its structural outlook has not changed,” he said. “What we are seeing is more of a postponement of issuance decisions amid both domestic and external noise. But given leverage levels, companies will still need funding to roll over debt and sustain operations.”

Rugani also noted that refinancing needs should soon bring issuers back to the market. “Companies still need funding and need to refinance more expensive debt,” he said. “Even expectations of a Selic rate at 12% by the end of 2026 were already encouraging liability management, but the need to raise funds remains.”

Thiago Junqueira, a partner at law firm Pinheiro Neto, said the market reflects a period of increased investor scrutiny. He noted that caution persists, as further debt restructuring cases are expected to emerge.

For now, market participants say there is little visibility on when conditions will improve. One executive said any recovery is likely to begin at the company level, with firms strengthening balance sheets and reducing leverage.

The companies mentioned declined to comment.

*By Fernanda Guimarães and Rita Azevedo — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Brazil’s Q1 earnings set to hinge on oil, rates and war

Higher oil prices may lift exporters’ results, but companies tied to domestic economy face weaker consumption, high borrowing costs and mounting inflation pressure

 

 

 

Brazil’s first-quarter earnings season, which will gather pace in the coming weeks, is set to be shaped heavily by local and global macroeconomic forces, as still-high interest rates and slowing consumer demand at home collide with the escalating conflict in the Middle East.

Company fundamentals are once again expected to take a back seat.

Fourth-quarter results had already confirmed analysts’ concerns, showing a real economy squeezed by high borrowing costs. But they also offered a clear picture of how geopolitical tensions, inflation and the reshaping of global supply chains are likely to steer corporate performance in the first quarter and throughout 2026.

“The fourth-quarter earnings season was weaker than expected and weaker than what companies had been showing in 2025,” said Fernando Ferreira, chief strategist at XP. Retail was the negative highlight, hit by slower gross domestic product growth and calendar effects that reduced store traffic in December.

“We already thought it would be a weaker season because of the impact of interest rates on the real economy. And that was, to some extent, what happened,” said Carlos Eduardo Sequeira, head of research at BTG Pactual. “We saw a sharp slowdown in profit, revenue and EBITDA growth during the fourth quarter compared with earlier periods.”

Aline Cardoso, head of equity research and strategy at Santander, said the earnings season showed a wide gap between domestic companies, whose results were hurt by 15% interest rates, and commodity exporters, which performed somewhat better. “It was a season marked by a resilient but slowing economy, and by increasingly cautious corporate messaging,” she said.

Export boost

For the first quarter, the divide between companies exposed to the domestic market and exporters is expected to widen. The main swing factor for earnings forecasts will be oil prices.

The war involving the United States, Israel and Iran has sharply altered expectations, driving up profit estimates for Brazil’s stock market because of the heavy weight of companies such as state-owned oil giant Petrobras.

“The market has been much more focused on macro than on company-specific factors,” XP’s Ferreira said. “The war and the spike in oil prices are proving to be a very strong trigger for earnings revisions. War, oil, inflation and interest rates are having a far greater impact than company-specific fundamentals in the first quarter.”

Although Prio’s management said on an earnings call that the first quarter still partly reflects the release of Venezuelan inventories after the fall of Nicolás Maduro’s government, analysts see the oil producer as the main near-term beneficiary because it is less constrained by hedge positions than rivals Brava and PetroRecôncavo.

In a recent report upgrading Petrobras to buy, Bank of America said higher oil prices should boost the state-controlled company’s results, especially cash generation for shareholders, easing recent concerns that it might need to take on more debt to maintain dividend payments.

Vale and trade tensions in focus

Another investor favorite in the current period of instability is Vale. In its first-quarter operating results, the Brazilian mining company showed resilient iron ore output and strong performance in base metals, which analysts see as important catalysts, together with high metal prices, for its financial results in the period.

The first quarter will also reflect the fallout from the tariff and trade dispute with the United States. The U.S. Supreme Court’s decision in February to strike down Donald Trump’s sweeping tariffs has already lifted sentiment among Brazilian exporters.

Tupy, a Brazilian maker of engine blocks and other auto parts, expects a significant increase in orders from automakers starting in the second half, while gun manufacturer Taurus said the 10% tariff imposed by Trump has already been offset by price increases passed on in the U.S. market.

Under pressure

But companies tied to the local economy, already grappling with a slowdown, now face worsening conditions. The surge in fuel prices is putting pressure on supply chains and threatens to rekindle inflation, limiting the Central Bank’s room to maneuver.

“We now see 250 basis points of cuts in the Selic base rate, with the Central Bank acting more cautiously, and that has a negative impact on companies,” Sequeira said.

With rate cuts likely to be slow and gradual, bringing little immediate relief to financial expenses, companies are moving ahead with their own adjustments. The push for technological innovation to reduce fixed costs has surged, and mentions of artificial intelligence in recent earnings calls have tripled, Santander’s Cardoso said.

Domestic companies and retailers are now recalibrating their expectations for the second quarter, when a boost to consumption from the World Cup and the traditional expansion of income-transfer programs in an election year are expected to provide the support that was missing at the start of the year, analysts said.

*By Felipe Laurence and Adriana Peraita — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Brazilian companies flag growing risks to staying afloat

Wave of balance-sheet warnings reflects tighter liquidity and mounting debt pressures

Retailer Marisa is one of the companies dealing with financial strain for some time — Foto: Divulgação
Retailer Marisa is one of the companies dealing with financial strain for some time — Photo: Divulgação

The financial troubles facing a group of listed companies have triggered an unprecedented wave of warnings in financial statements, often issued by management itself, pointing to material uncertainty related to the companies’ ability to continue as a going concern. When that happens, the common thread is usually a lack of sufficient short-term funds to cover debt coming due soon.

In the latest earnings season, cancer care provider Oncoclínicas, petrochemical company Braskem, fashion retailer Marisa, supermarket chain GPA, hospital group Kora Saúde and ethanol, sugar and bioenergy producer Raízen all published financial statements carrying that disclaimer. Among them, GPA and Raízen filed for out-of-court debt restructuring this year.

A Valor survey showed that at the end of 2024, those companies had combined positive shareholders’ equity of R$23.6 billion. A year later, the combined equity of the groups carrying going-concern warnings had fallen to negative R$13.7 billion.

Broadly speaking, the picture boiled down to three situations: erosion of equity at Oncoclínicas, Kora, GPA and Marisa; a swing into negative equity at Raízen; or an already negative equity position that deteriorated further at Braskem.

The view is that high interest rates, demand weakened by a tougher environment and company-specific management problems hurt results and are likely to prompt similar warnings from more companies this year.

Pressure from debt, liquidity

Oncoclínicas, which released its management report last week, said in the notes to its financial statements that the uncertainty is tied to R$430.8 million deemed lost after investments in Banco Master, in addition to the “collapse” of Unimed Ferj, which totaled R$861 million. The company also cited a “decline in recurring revenue” following a review of its commercial policy, making it also an operational issue.

Management said the rise in the company’s total leverage ratio was driven mainly by the macroeconomic backdrop in 2025, including higher interest rates and rising defaults.

On the risks to the company’s continuity, Deloitte said Oncoclínicas posted a consolidated net loss of R$3.6 billion in 2025 and had negative working capital of R$2.3 billion in December 2025. In other words, short-term debt exceeded short-term assets by more than R$2 billion. A year earlier, that figure had been positive at R$2.2 billion.

When a company breaches covenants agreed in contracts with creditors, debt can be accelerated, creating a snowball effect because the early maturity swells total gross debt.

At Braskem, KPMG said in the company’s 2025 financial statements that the material uncertainty surrounding its ability to continue as a going concern was based on consolidated negative equity of R$16.5 billion and negative working capital of R$9.7 billion. That means short-term liabilities exceeded short-term assets by almost R$10 billion.

In explaining the rise in this risk, Braskem cited years of weaker-than-expected global demand and excess global supply, which led to a deterioration in the financial condition of both the company and Braskem Idesa, its joint venture with Mexico’s Idesa group formed in 2010.

The company said in its last year’s financial report that it remains in operation, with business activities ongoing and initiatives under way to restructure its finances and rebuild liquidity.

Marisa under going-concern warning

Another company that has been dealing with financial strain for some time, Marisa also disclosed material uncertainty related to its ability to continue as a going concern in its year-end 2025 earnings report. Its auditor, BDO, highlighted the issue in its opinion, although the fashion retailer itself used milder language when addressing the matter.

To illustrate the amounts involved, nearly R$200 million in debt comes due within 12 months from the end of 2025, with another R$138 million maturing between 13 and 24 months. A year earlier, at the end of 2024, the total coming due ws R$123 million.

In Marisa’s 2025 report, BDO cited a R$59.9 million net loss last year, down 81%, and negative working capital of R$360.7 million. A year earlier, the retailer’s annual report had already highlighted the same going-concern issue, and working capital was also negative, though at a smaller R$308 million.

In the notes to its 2025 financial statements, Marisa acknowledged those figures but said it prepared the statements on the assumption that it will be able to meet its obligations. It also said management is implementing measures to restore its financial balance and equity position.

At the same time, the retailer said its cash-flow projections point to the need to maintain financial discipline and carry out operational and financial measures.

Asked for comment, Braskem, GPA, Kora, Oncoclínicas and Raízen declined to comment. Marisa said in a statement that the emphasis mentioned by its auditors does not represent a new development, as it had already been disclosed in previous periods, and reaffirmed that its financial statements adequately reflect the retailer’s equity and financial position, in compliance with Brazilian accounting standards.

*By Adriana Mattos and Fernanda Guimarães — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Brazil returns to euro bond market with €5bn deal

National Treasury’s record issuance and Minerva sale signal reopening, but investors remain selective amid global volatility

Brazil’s National Treasury returned to the European bond market with a €5 billion issuance, the largest in its history. Despite market volatility tied to the war in Iran, the transaction drew nearly €16 billion in demand and attracted more than 700 investors.

Banking executives said the deal could pave the way for Brazilian companies to tap the euro-denominated bond market. The strong reception reflects pent-up demand after Brazil stayed away from euro issuance for more than a decade.

“The deal showed investors had been missing Brazil in the euro market,” said Claudio Matos, head of global capital markets for Brazil at BNP Paribas, which coordinated the offering. “It also confirmed that, despite turbulence, there is still appetite for well-structured debt deals.”

Pipeline builds in dollars

Executives in fixed income say conditions are also favorable for dollar issuance, with around eight companies preparing to come to market in the next two weeks. Expected names include Banco do Brasil, Caixa Econômica Federal and C6 Bank, according to sources.

On Wednesday (15), Brazilian meatpacker Minerva raised $600 million in a 10-year bond, marking its return to the dollar market since 2023. Minerva’s deal priced at 7.62%, in line with expectations. The company said proceeds will be used to repay debt and for general corporate purposes.

Another potential issuer is J&F, the holding company of the Batista family. Earlier in the current issuance cycle, JBS, part of the same group, raised $500 million through a reopening of a $2 billion deal completed in late March.

Valor had reported earlier this week that the Treasury initially aimed to raise €1.5 billion after investor meetings. Strong demand allowed the government to increase the size significantly.

Terms and structure

 

The Treasury split the issuance into three tranches with maturities of four, seven and ten years. Pricing tightened by 35 basis points from initial guidance.

The shortest tranche priced at 145 basis points above the mid-swap rate, a benchmark based on European government bonds. The seven- and ten-year notes came at spreads of 210 basis points and 255 basis points, respectively.

The €2 billion bond due in 2030 carries a 4.24% annual coupon. The €1.5 billion 2033 bond offers a 4.87% coupon and a yield of 5.03%, while the €1.5 billion 2036 bond pays a 5.5% coupon with a 5.62% yield.

Selective appetite

Despite the reopening and prospects for further issuance, the market remains cautious. Investors are still selective, with stronger demand focused on higher-quality issuers.

More leveraged companies are likely to face greater scrutiny, especially after recent corporate distress and debt restructurings involving dollar bonds, including cases at Braskem, Raízen and Ambipar. More recently, higher leverage at Aegea has also added to uncertainty.

Investment banks had expected a wave of Brazilian issuance early in the year, as companies sought to get ahead of election-related volatility. Those expectations were disrupted by the conflict in Iran, which began in late February, and earlier concerns about rising leverage among issuers.

Milestone

So far this year, in addition to Brazil’s Treasury and Minerva, issuers such as Bradesco, BTG Pactual, FS Bio, Sabesp, Azul and JBS have tapped international markets. Total issuance reached $18.4 billion, including the Treasury deal converted into dollars. In 2025, Brazilian companies raised $34 billion across more than 40 transactions.

Speaking in Washington during meetings of the International Monetary Fund, Finance Minister Dario Durigan called the Treasury’s issuance “historic.” “I committed to advancing the internationalization of Brazil’s public finances, and today we can announce the strong success of this sovereign bond issuance in Europe,” he said.

Last week, Durigan said the Treasury planned to issue bonds in China and Europe later this year. The agency is also monitoring the dollar market.

“We had a very strong and very significant issuance, with demand several times greater than the amount actually sold,” Treasury Executive Secretary Rogério Ceron said on Wednesday.

The Treasury said in a statement that the issuance supports efforts to extend the maturity of public debt, diversify funding sources and broaden the investor base. About 69% of investors came from Europe, 9% from Asia and roughly 13% from Latin America, including Brazil.

“The strong demand, large size and tight spreads show investor confidence in Brazil’s sovereign debt and mark the country’s return to the European market,” the Treasury said.

The Treasury deal was arranged by BBVA, BNP Paribas, Bank of America and UBS BB. Minerva’s issuance involved Bradesco BBI, J.P. Morgan, Morgan Stanley, Bank of America, BB Securities, BBVA, HSBC, Mizuho, MUFG, Rabo Securities, Santander, SMBC Nikko and XP.

*By Rita Azevedo, Fernanda Guimarães, Giordanna Neves and Gabriel Shinohara — São Paulo and Brasília

Source: Valor International

https://valorinternational.globo.com/

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