Brazil: Standardization Of Debentures In Brazil

Last Updated: 16 November 2015
Article by Walter Stuber

To encourage the issuing and trading of debentures in the domestic market, the Brazilian Association of Entities of the Financial and Capital Markets (Associação Brasileira das Entidades dos Mercados Financeiros e de Capitais - ANBIMA) developed a proposal for standardization of the deeds of these assets.

The initiative sets parameters for the order and the drafting of the provisions, in addition to suggesting some calculation patterns.

The set of suggestions are described in the form of guidance and a model of deed, whose membership is voluntary. The guidance contains the guidelines for the preparation of the deed of debenture. The model of deed reproduces the features and sequence of information that the document should contain to follow the recommendations of good practice. The idea is to induce the issuers and coordinators of offers to use the proposed model, which does not interfere in the negotiation features of the assets, as term and profitability, for example.

The standardization is an effective way to promote the increase of transparency and liquidity of the assets in the secondary market, strengthening the domestic fixed income segment and providing direct benefits for issuers and investors.

The benefits of standardization are: (i) more agility to develop and analyze the deeds; (ii) reduction of time and costs for structuring and distribution of supply, market exposure and placement; (iii) make it easier to access information, comparing assets and provide for early redemption and prepayment clauses; and (iv) improvement in asset pricing process through unified calculation criteria.

The standardization process is voluntary, and should be stimulated by the institutions associated to ANBIMA as a model of best practice.

In practice minimum parameters are defined for deeds to offers of debentures distributed with ample or restricted efforts, pursuant to the provisions of ICVM 400 and ICVM 476, respectively[1]. These parameters refer to forms of writing and homogenization of the ordering of clauses, the standardization of calculation and consolidation of amendments to the original deed.

ANBIMA proposes a common ordering of the clauses of the deeds and with predefined sequence for easy access and comparability of information for investors.

In the case of assets with total optional early redemption or partial special depreciation minimum time limits are defined: 18 months or 40% of the total term of the asset, whichever is greater.

There is forecast for the premium payment with standardized calculation and expressed in a fixed annual fee (% p.a.) for debentures linked to DI[2] and a vertex of NTN-B[3] for debentures linked to the National Consumer Price Index - Broad (Índice Nacional de Preços ao Consumidor Amplo – IPCA)[4].

The partial optional early redemption is forbidden. The issuer has the option to provide early redemption offer and optional acquisition clauses but both mechanisms require the investors´ agreement.

Minimum items to be included in the non-automatic and automatic accelerated maturity clauses are defined. The non-automatic accelerated maturity depends on the call of a general meeting by the trustee (agente fiduciário) and the approval of the debenture holders. The automatic accelerated maturity does not depend on any such conditions.

The incorporation of the events suggested in the guidance of ANBIMA as triggers to the "accelerated maturity" is mandatory but not exhaustive. At the discretion of the parties involved in the structuring of the asset, other items of risk regarding the ongoing operation or the segment of the issuer can be added. The minimum items that must be provided on the accelerated maturity clause of the deed of issue of debentures are: (1) default of any pecuniary obligation in respect of the debentures; (2) accelerated maturity of any debt of the issuer; (3) request or declaration of bankruptcy, judicial or extrajudicial recovery or similar events involving the issuer; (4) application for liquidation, dissolution or extinction of the issuer; (5) amendment of the corporate purpose of the issuer; (6) transformation of the issuer into other type of company; (7) default of any non-pecuniary obligation in respect of the debentures; (8) change of control of the issuer; (9) default of other debts of the issuer; (10) corporate restructuring; (11) transfer to third parties of the obligations of the issuer arising from the deed; (12) lack of constitution of guarantees of the debentures (if there are guarantees in the transaction); (13) sale or encumbrance of assets of the issuer (as applicable); (14) reduction of capital of the issuer, observed the Brazilian Corporation Law; (15) protest of securities against the issuer (as applicable); (16) non-compliance with a court, administrative and/or arbitral decision by the issuer; (17) failure to obtain, non-renewal, cancellation, revocation or suspension of authorizations, concessions, permits and/or licenses necessary for the activity of the issuer (as applicable); (18) if the issuer is in default in relation to any financial obligation provided for in the deed, and payment of dividends or interest on net equity distribution above the minimum mandatory dividend (as the case may be); (19) falsehood or inaccuracy of the representations or warranties provided by the issuer in the offering documents (as applicable); (20) resource allocation of the issue of debentures differently to that provided for in the deed; (21) non-observance of financial ratios (as the case may be, and in the event of non-inclusion of this event, the deed should contain a provision stating that there is no requirement for compliance with financial ratios by the issuer); and (22) acting without complying the provisions of Law No. 12,846 of August 1, 2013 (the Brazilian Anti-Corruption Law)[5] or any other applicable legislation.

For non-declaration of the prepayment the minimum quorum in the general meetings must be equivalent to the total number of debenture holders who own 75% of the total volume of debentures in circulation. The quorum of 90% of the debentures is required at the general meeting to change the features of the debentures. There is flexibility in the requirements mentioned herein, in the case of ICVM 400 debentures directed to retail and assets subject to Law No. 12,431, of June 24, 2011 (Law 12,431/2011)[6], with high sprayed potential.

These are additional obligations of the issuer: (i) disclosure of the calls for general meetings in the site of ANBIMA; (ii) consolidation of the deed after any amendments and disclosure in the site of ANBIMA; (iii) inclusion of a legal notice (disclaimer) in the deed of assets that do not have financial ratios; and (iv) self-declaration that the issuer follows voluntarily the standard proposed Guidance for deeds of ANBIMA.

There are also guidelines for criteria of calculations, in order to make the pricing of assets and expand the trading on the secondary market, as follows: (a) unit price of R$ 1 thousand; (b) adoption of the standard rates based on 252 business days; (c) use the ANBIMA projection for price indices; (d) standardization of compensation dates of IPCA assets to increase the comparability of the debentures with government securities; and (e) disincentive to escalation or re-pricing of interest and incorporation of interest to principal. There is a relaxation of such incorporation, however, in the case of project debentures subject to Law 12,431/2011 regarding issues related to the Coverage Index (Índice de Cobertura)[7].

With the standardization of the deeds, ANBIMA consolidates best practices guidelines for debentures, expanding access to information and encouraging the increased liquidity of the securities. This is a process that aims at constant improvement to incorporate the evolution of the features of the transactions over time.

[1] ICVM 400 and ICVM 476 refer to Instructions Nos. 400 and 476, of December 29, 2003 and January 16, 2009, respectively, both issued by the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários –CVM).

[2] The term DI comes from CDI, which means interbank deposit certificate (Certificado de Depósito Interfinanceiro), which is the interest rate used in transactions between banks.

[3] The National Treasury Note B (Nota do Tesouro Nacional B - NTN-B) is a federal public title, with a post fixed revenue, offered by the Brazilian Treasury, whose profitability is composed of an annual fee agreed at the time of the purchase plus the variation of the IPCA.

[4] The IPCA is an official Federal Government index for measurement of inflationary goals released by the Brazilian Institute of Geography and Statistics (Instituto Brasileiro de Geografia e Estatística – IBGE).

[5] This law contains the rules on the administrative and civil liability of legal entities for the practice of acts against the public administration, Brazilian or foreign.

[6] These assets are the debentures issued by a special purpose company, constituted in the form of joint-stock company (sociedade por ações), related to fundraising with views to implement investment projects in the infrastructure area, or economic intensive production in research, development and innovation, considered as priorities in the manner regulated by the Brazilian federal executive branch.

[7] The Coverage Index measures how much the operating income may decrease before the company becomes unable to cover its annual costs.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Walter Stuber
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions