Alerts
Emergency support measures presented by the main public agents of the financial market
The main public agents of the financial market have been attentively launching economic measures to combat the economic impacts resulting from Covid-19.
Central Bank of Brazil (BACEN) and National Monetary Council
BACEN has announced the creation of a new credit line, in the amount of R$ 40 billion, that will be available for a period of 2 months, in order to finance the payroll of small and medium-sized companies, with annual revenues ranging from R$ 360 thousand to R$ 10 million, which will be on-lent by private banks, members of the Brazilian Federation of Banks (Febraban).
The package aims at preventing the mass dismissal of employees by small and medium-sized companies, ensuring the maintenance of the cash flows of such companies for a period of 2 months, during which the company cannot dismiss the employees receiving the benefit.
The transfer of the funds will be made directly to the employee’s bank account and will be limited to the amount of 2 minimum wages per month (R$ 2,090) per employee.
The financing will have an interest of 3.75% per year, with a grace period of 6 months and a term of 36 months for payment.
The National Monetary Council had already issued new rules that release the banks from provisioning restructuring transactions that take place in the following six months and reduce the required minimum capital. With such measures, it is expected that the renegotiation of up to R$ 3.4 trillion in loans becomes easier and that the capacity of the financial system increases by up to R$ 637 billion.
Brazilian Development Bank (BNDES)
The President of BNDES, Gustavo Montezano, has announced the creation of an emergency credit line of R$ 2 billion for healthcare companies. BNDES estimates that there are already 30 companies in the provided sector that could apply for such credit line.
After authorization by the National Monetary Council, BNDES will be able to provide resources to fintechs authorized to operate as Direct Credit Entities (SCDs).
Caixa Econômica Federal Bank (CEF)
CEF has reduced its interest rates on credit lines and will inject a total of R$ 111 billion in the market, with focus on financing working capital, purchase of portfolios, healthcare companies and agribusiness. In addition, CEF has extended from 60 to 90 days the suspension of payment obligations by borrowers.
Brazil Northeast Bank (BNB)
BNB announced the possibility of suspending principal and interest payment obligations for up to 6 months. BNB is also offering credit line for working capital, with a grace period of up to 6 months for commencing the payment of new transactions. The expectation of BNB is to provide around R$ 1.5 billion in the credit line for working capital of micro and small companies, between the months of April and September.
South Region Development Bank (BRDE)
BRDE will make available around R$ 1.3 billion by the end of 2020 for micro, small and medium-sized companies and individual entrepreneurs.
Amazon Bank (BASA)
As from March 30, BASA will allow companies of all sizes and segments to request the suspension of principal and interest payment obligations for 6 months in connection with commercial and development credit operations entered into until February 2020.
Minas Gerais Development Bank (BDMG)
BDMG has created 3 credit lines with special conditions to support companies of all sizes in the healthcare sector in the State of Minas Gerais.
Espírito Santo Development Bank (BANDES)
BANDES has announced the possibility for individuals and companies to request the suspension of principal and interest payment obligations for up to 6 months.
Bank of Brasília (BRB)
BRB will release R$ 1 billion for working capital loans that will be made available to companies impacted by Covid-19. The interest rate of the loans will be 0.8% per month, with a grace period of 6 months and a term of 36 months for payment.
Our team of Project Finance, Credit Operations, Banking Law and Capital Markets will be available for any clarification required and to assist in respect of the above measures.
