Brazil’s government and the Federal District reached an agreement, documented in a court filing, to provide a 6 billion‑real (approximately $1.19 billion) loan to the state‑run lender BRB.
The credit operation will be executed by the Federal District government together with the credit‑guarantee fund (FGC). Guarantees will be supplied by a bank syndicate, with the district’s revenue streams from state and municipal participation funds serving as collateral.
The arrangement does not include any federal guarantee; Brazil’s Treasury has indicated that the Federal District lacks sufficient payment capacity, which bars it from obtaining loans backed by the federal government.
Under the loan terms, the Federal District has committed to implementing fiscal adjustment measures.
BRB is currently working to mitigate losses stemming from allegedly fraudulent credit portfolios it purchased from Banco Master.
