From The Rio Times · Lucía Martínez · · 1m 40s
Brazil May Buy $18bn of Unpaid Debt
Brazil's government plans to buy up to $18bn of overdue personal debts at a 90% discount, part of a debt relief program.
In brief
Brazil's government plans to buy up to $18bn of overdue personal debts at a 90% discount, part of a debt relief program. Brazil may purchase up to $17.9 billion in overdue personal debts at a 90% discount through its Desenrola 3.0 program. Originally reported by The Rio Times.
Brazil's Debt Relief Plan
Brazil's government may buy up to R$90 billion (US$17.9 billion) of overdue personal debts from banks and funds.
Discount and Cost Cap
At a 90% discount, the state would pay at most R$9 billion (US$1.8 billion) for the debt.
Desenrola 3.0 Program
The program is part of Desenrola 3.0, the third round of a federal debt-relief initiative.
Auction Timeline
Banks are asked on Thursday 22 October to state how much debt they would sell; the auction is planned for November or December.
Eligible Debts
Debts under R$10,000 (US$1,990) each, overdue between two and 4.5 years, are covered by the program.
Finance Minister's Statement
Finance Minister Dario Durigan said the government expects lenders to offer about R$90 billion in total debt.
Political Context
Durigan criticized Flávio Bolsonaro's proposal to buy debts of defaulting Brazilians and refinance them through Caixa Econômica Federal.
Impact on US Investors
US investors in Brazilian banks like Itaú and Nubank face uncertainty over how much debt will be sold and at what price.
What's Unknown
Banks have not yet specified how much debt they will offer or the discount they will accept.
Congress Approval Needed
The measure must be approved by Congress within 120 days to become law.
The short version
Brazil may purchase up to $17.9 billion in overdue personal debts at a 90% discount through its Desenrola 3.0 program.
