The National Bank for Economic and Social Development (BNDES) will sell part of the defaulted credits that make up its portfolio. The announcement for the auction, which is scheduled for March 31, was launched on December 21. The list of credits for sale includes 323 operations involving 251 different debtors, with a total accounting balance of R$160 million.

The securities will be sold for the highest bid value. Interested parties must apply by January 15 and information about the portfolio will be available to qualified investors between February and March. Bids will be presented between March 25 and 30.

According to BNDES, the bonds for sale have been in the bank’s portfolio for more than 13 years, and in that period there have been several unsuccessful attempts to recover debts, either through renegotiation or legal actions.

All the credits come from indirect operations originated in banks that were interrupted in their activities by intervention or extrajudicial liquidation. By law, they have been subrogated to the BNDES, i.e., their ownership has been transferred to the development bank.

For the period of default, the credits were entered in the balance sheet of the BNDES at a loss. The bank’s objective with the assignment is to optimize the high cost of maintaining these assets that are difficult to recover and with limited returns.

The public notice states that the minimum amount estimated for the assignment of the portfolio will be confidential and that payment will have to be made in cash. BNDES is betting on the interest of companies specialized in increasing the recovery capacity of the securities.

In the last decade, according to the bank, the number of new securities of this type in its portfolio has fallen drastically, to only 15, as a result of measures that have reduced exposure to problematic transfer agents.

Original Story: Seu Dinheiro | Estadão Conteúdo
Photo: Photo by Doll91939 in Wikimedia Commons
Translation/Edition/Summary:Prime Yield