Brazil Seeks R$10 Billion Lifeline for Correios as Bank Talks Stall

Overview

• An initial negotiation round with a bank consortium collapsed over high rates that would cost roughly R$3 billion per year, prompting Correios to approach more lenders with a 15‑day window and a target cost of up to 120% of the CDI.
• Correios reported an accumulated loss of R$4.3 billion in 2025 and executives warn payroll and supplier payments could be jeopardized in December without new funding, with at least R$5 billion sought before year‑end.
• The company submitted a Recovery Plan to the Federal Audit Court that includes a voluntary separation program for at least 10,000 of 85,000 employees, closure of about 1,000 units, and worker reallocations targeting R$830 million in savings.
• Treasury backing faces hurdles because Correios may not meet repayment‑capacity rules, and the requested R$10 billion dwarfs past federal guarantees such as the R$4 billion extended to Eletrobrás in 2014.
• An alternative rescue via a Caixa‑structured real‑estate fund using 2,366 properties valued at R$5.4 billion is delayed by missing data, while a breach of a prior loan covenant has already raised borrowing costs and could trigger retention of company funds.