Correios Seek Final Paperwork to Unlock R$7 Billion Loan

Overview

• Correios say they expect to finish remaining documentation within days so the contracted R$7 billion syndicated loan can be disbursed if the paperwork and guarantee are approved.
• The loan is structured with Banco ABC, Citibank, Deutsche Bank and J.P. Morgan at a cost of 114.26% of the CDI, a 15-year term and a three-year grace period.
• Correios formally asked the National Treasury for a federal guarantee on September 3 and the Treasury’s capacity review remains under analysis after the TCU questioned the review done for the prior R$12 billion operation.
• Contract terms require Correios to pursue a R$6 billion federal transfer already budgeted for through 2027 and state that the loan must be repaid in full if the company is privatized.
• If the guarantee is approved and funds arrive, the loan would ease the company’s cash needs under a restructuring that trimmed projected funding needs from R$20 billion to R$19 billion and could affect workers through ongoing voluntary separation and operational changes.