An overview of debt renegotiations in Brazilian publicly listed firms for the period from 2010 to 2021
DOI:
https://doi.org/10.11606/issn.1982-6486.rco.2025.218938Keywords:
Renegotiations, Waivers, Debt, Incomplete contractsAbstract
Debt renegotiations play a fundamental role in maintaining contracts between creditors and borrowers. However, little is known about the characteristics of these renegotiations, especially in emerging economies like Brazil. High asymmetry of information, few protections for creditor rights, and the difficulty in executing the debt, which are characteristics of these economies, make renegotiation a fundamental instrument in the contractual relationship between creditor and borrower. Therefore, we aim to comprehensively analyze debt renegotiations within an emerging economy, specifically Brazil. The database was prepared manually by reading more than 3,000 notes to financial statements, considering all the companies listed on the Brazilian B3 stock exchange in 2021. We analyzed data from 12 years (2010 to 2021). This study reveals a higher concentration of debt renegotiations focused on covenants (waivers) and term extensions. Moreover, most renegotiations occurred in the fourth quarter, with a relevant concentration occurring during the COVID-19 pandemic (2020 and 2021). Private banks accounted for approximately 45% of renegotiations, while capital market credit represented nearly 40%. Notably, companies in good financial condition were less likely to renegotiate their debts.
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Copyright (c) 2025 João Paulo Augusto Eça, Tatiana Albanez, Mauricio Ribeiro do Valle
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