Brazil's government, federal district agree on BRB loan deal

BRASILIA - Brazil's government and the Federal District have reached a deal for a loan to support struggling state-run lender BRB, a court document showed on Thursday.

• Deal allows the Federal District to contract a loan of approximately 6 billion reais ($1.19 billion) from credit-guarantee fund FGC to support BRB

• Guarantees secured from a bank syndicate using the district's revenue flows from state and municipal participation funds as collateral

• Lenders Bradesco, Itau Unibanco, BTG Pactual, and state-run banks Caixa Economica Federal and Banco do Brasil part of the syndicate, sources said

• No federal guarantee will be provided

• Brazil's Treasury considers the Federal District lacking adequate payment capacity, preventing it from taking loans with federal backing

• As part of the deal, the Federal District commits to adopting fiscal adjustment measures

• BRB has been trying to address losses tied to allegedly fraudulent credit portfolios bought from Banco Master

• Banco Master was liquidated by Brazil's central bank in November amid severe liquidity challenges

($1 = 5.0421 reais)

(Reporting by Bernardo Caram and Ricardo Brito in Brasilia; Paula Arend Laier and Luciana Magalhaes in Sao Paulo; Writing by Isabel Teles; Editing by Rod Nickel and Gabriel Araujo)

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This story was originally published May 28, 2026 at 11:42 AM.