Brazil: The Role Of BNDES In The Brazilian Capital Markets

The growth of companies is attributed to capital investments from shareholders, reinvestment of profits and credit operations. In the current stage of the Brazilian economy, it is fundamental to strengthen and increase the number of companies with securities traded in the capital markets, an important instrument for furthering internal and external savings.

The Brazilian Development Bank (Banco Nacional de Desenvolvimento Econômico e Social – BNDES) operates several financing modalities available to companies and can also participate as an underwriter of securities in publicly-held corporations, or in companies that, in the medium run, can enter capital markets, including operations for internationalization, restructuring of competitive companies, mergers and acquisitions.

Innovative small and medium-sized companies, which are prioritized in the BNDES' capitalization efforts, can receive direct participation and/or participation through closed investment funds. Depending on their regional or sectorial operations, this offers a greater operability range, thus allowing the leveraging of private resources for the capital of these companies.

The BNDES' operations in the capital markets aim to:

  1. strengthen capital markets through new market operations; 
  2. disseminate the concept and encourage the use of corporate governance by companies;
  3. expand the demand and liquidity of securities;
  4. contribute to the democratization and strengthening of the capital structure of companies; 
  5. develop products that make the capital markets more attractive and safer to small investors;
  6. develop the closed funds industry; and 
  7. support innovative small and medium-sized companies.

To achieve these goals, the BNDES permanently operates:

  1. in the development of technical tools, utilizing innovative investment analysis techniques, specific mechanisms for each security value, legal models and varied divestiture mechanisms; 
  2. in the elaboration of indirect programs through a minority stake in closed funds administrated by third parties - emerging companies, private equity, of governance/liquidity – which perform the important task of expanding and providing a wider range to the operations; and 
  3. in the proliferation of better corporate governance practices within companies in which it has a vested interest, so as to provide greater transparency and respect for minority shareholders, working together in this regard with the Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM) and the Brazilian Securities, Commodities and Futures Exchange (BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros). 

BNDES can participate, as a subscriber of securities, in publicly-held corporations, for public or private issues, or in companies that, in the short or long run, can enter in the capital markets, for private issuance. The securities considered are the following: stocks (shares); simple debentures; convertible debentures or permutable by shares; subscription bonus; options and other related products; as well as shares (quotas) of Direct Credit Investment Funds (Fundos de Investimento em Direitos Creditórios - FIDC).

For subscription operations of securities, the equity participation that results from the subscription of shares or from the conversion of debentures will be limited to 1/3 of the total capital of the company. In case of companies with annual net revenues equal to or less than US$ 250 million, found in the closing balance sheet for the year preceding the approval of the transaction, this limit can reach 40%.

BNDES may subscribe unsecured debentures, issued by publicly-held corporations, with real guarantee, fluctuating guarantee or without preference (unsecured), traded at the securities market through primary or secondary public distributions. The purposes of these subscriptions are the following:

  1. to develop the fixed income market of corporate securities, issued by publicly-held corporations operating in the economy sectors supported by BNDES, except for financial institutions, leasing or other enterprises integrating financial conglomerates;
  2. to contribute to business strategy execution of the issuing corporations, with a clear identification of results for the Brazilian economy at medium and long-term; 
  3. to support the adoption of distributing and negotiating procedures that privilege, among others, the transparency, the dispersion of securities in the market, the liquidity, including the market-maker participation, standardization and governance; 
  4. to optimize the management of BNDES funds, directed to eliminate the unbalance between liability and asset positions generated by the operations performed in the ambit of its corporate object; 
  5. to generate new sources of funds, upon a policy of return on investments higher than the usually carried out, which, as a result of the increase in results, may contribute to a cost reduction of the other financial products offered to its clients; and
  6. to increase the offer of financial products and services to BNDES clients.

The supportable items are: (a) investments in fixed assets;  (b) working capital, in cases when it is essential to the success of the issuing corporation's business; (c) research and development expenditures or in other intangible assets that are key factors for the success of business undertaken by the issuing corporation; (d) mergers and acquisitions, in cases when scale and scope gains resulting from business consolidation are important to stimulate the issuing corporation's growth; and (e) other purposes not described in the previous items, provided that there is an identification, at the issuing corporation's strategy, of reasons justifying the BNDES support by means of the acquisition of debentures.

The subscription or acquisition of debentures in public offers will be limited to 15% of: (a) the total amount of each series initially offered, in case of a primary offer; (b) the total amount of each series, in a secondary public offer; and (c) the volume of each outstanding series, in case of acquisition in the secondary market.

BNDES also supports investments by subscribing FIDC´ shares, using market conditions, directed to support productive or suppliers´ chains. The supportable FIDCs aim at commercialization of machines and equipment in the internal market; and fixed capital investment projects.

The FIDC that presents any of the following aspects will be excluded:

  1. conflict of interests in the Fund management proposal; 
  2. non-alignment of the FIDC investment model and/or focus to the operation priorities of BNDES; 
  3. existence of any lawsuit with CVM or any entities directly or indirectly controlled by the Federal Government, or other institutions, that BNDES considers impeditive for the analysis process; 
  4. spread proposed by the administrator and/or manager in disagreement with the rates defined in the norms of BNDES; 
  5. risk rate of the Fund shares, executed by a risk rating agency, when its classification is lower than A; and 
  6. shares spread in disagreement with he rates usually used in the market. 

The proposals formulated and submitted to BNDES by the Fund managers or administrators must include: (a) the names and history of the agents involved in the Fund structure and administration/management, such as structuring agent, administrator/manager, risk rating agency, attorneys' office, audit company, custodians and others; (b) draft of the regulation, which defines the subordination of the shares in case of more than one class, eligibility criteria of credit rights, amortization policy and share recovery policies and selection of assignors and drawees; (c) costs involved in the structuring and administration rates; and (d) attraction policy of other investors. 

The level of participation is limited to 25% of the total senior shares issued, in case of Funds directed to the commercialization in the internal market of machines and equipment, and up to 80% of the total share issued, in case of Funds directed to fixed capital investments. The participation limit is to R$ 120 million per Fund. The Fund must be constituted in the form of closed condominium with shares registered for the negotiation in an electronic negotiation system of corporative securities.

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
Adriana Maria Gödel 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