BNDES adopts measures to support the Brazilian economy and the private sector
The National Bank for Economic and Social Development (BNDES) announced this Sunday the adoption of measures to support workers and the private sector, totalling about BRL 55 billion, to give breath and support to the economic activities and productive structures of the country, at this time of temporary crisis due to the coronavirus.
These measures will be adopted through the coordination of BNDES with the Presidency of the Republic and with all Ministries, in a mission considered anti-cyclical by BNDES, and incomparable with solutions and products presented for the confrontation of economic crises in the Brazilian past.
The Brazilian government follows the American and European trend, with the adoption of measures across various sectors of the economy, without prejudice to the adoption of specific measures for sectors prioritized by the Presidency of the Republic, together with the Ministries, to be proposed by BNDES as of tomorrow. BNDES foresees the adoption of these sectoral measures, mainly in support to states and municipalities and in the hotel, tourism, airline companies, restaurants and bars sectors. In addition, it is studying the creation of guarantee funds in the credit market, to increase the liquidity of the system and increase risk appetite, facilitating the flow of capital in the Brazilian economy.
The first of the four transversal measures adopted by BNDES focuses on the release of BRL 20 billion to workers, through the transfer of PIS/PASEP resources to FGTS (Guarantee Fund for Service Provision Period) accounts, with a focus on groups of workers to be defined by the Ministry of Economy.
The three additional transversal measures, worthing BRL 35 billion, focus on the private sector and on combating the effects of the deceleration of production on the finances of resource-taking companies.
· Standstill for direct operations with BNDES. The borrowers of direct credit operations with BNDES may request the temporary suspension of interest and principal payments, for up to six months, with capitalization of this amount at the end of the contract execution period, and debt extension (standstill). This measure totals BRL 19 billion. The borrowers must present a situation of solvency and compliance, and must not be part of syndicated loans with funding through the issuance of debentures. BNDES would request, in this case, for the dividends be limited to the minimum required by law.
· Standstill for indirect operations with BNDES. This measure, predominantly intended for medium and small companies, totalling BRL 11 billion, allows such borrowers to request from financial agents in indirect operations with BNDES, the temporary suspension of payments (standstill), for up to six months, of interest and principal, with capitalization of this amount at the end of the contractual term. These medium and small companies must also present a situation of compliance and solvency with BNDES and have been financed with BNDES lines, through the ‘on-lending’ of financial agents.
· Expansion of credit for MSME. Expansion of the working capital limit for medium and small companies (those with up to BRL 300 million of annual revenues), with the concession of BRL 5 billion of working capital, offered through ‘on-lending’’ by financial agents, BNDES’ credit transferors. With this measure, BNDES intends to make available up to BRL 70 million for each medium and small company, with a grace period and extended term for the payment of these resources.
BNDES is also studying the easing of some of the conditions for access to these credit lines by medium and small companies, such as, for example, the waiver of the presentation of CND (negative certificate of debts), already announced by the Ministry of Economy.
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