Treasury pays R$1.63 billion in state and municipal debts in June

Of the total, R$680.51 million are unpaid debts by the state of Rio de Janeiro; R$633.60 million from Minas Gerais; R$144.04 million from Pernambuco; R$77.17 million from Goiás; R$60.20 million from Rio Grande do Sul; and R$ 32.82 million from the municipality of Taubaté (SP).

This year, there are already R$ 6.88 billion in state debts honored by the Union. Those with the highest amounts paid were Rio de Janeiro (R$ 2.18 billion), Minas Gerais (R$ 2.10 billion) and Rio Grande do Sul (R$ 682.90 million). In relation to the municipalities, only the city of Taubaté had debts covered by the Treasury last month.

Since 2016, the Union has paid R$58.61 billion in guaranteed debts. In addition to the monthly report, the National Treasury also makes data available on the Honored Warranties Panel.

The guarantees represent the assets offered by the Union – represented by the National Treasury – to cover possible defaults on loans and financing by states, municipalities and other entities with national banks or foreign institutions, such as the World Bank and the Inter-American Development Bank (IDB). As the guarantor of the operations, the Union is informed by creditors that a certain portion of the contract has not been settled.

Collateral recovery

If the entity does not fulfill its obligations within the stipulated period, the Treasury compensates for defaults, but discounts the amount covered by ordinary federal transfers – such as revenue from participation funds and tax sharing, in addition to preventing new financing. There are cases, however, of blocking the execution of counter-guarantees based on the adoption of a tax recovery regime or through judicial decisions that suspended execution.

Overdue obligations incur interest, arrears and other operating costs related to the period between the maturity of the debt and the effective honoring of the amounts by the Union.

Since 2016, the Union has recovered BRL 5.61 billion in counter-guarantees. The amount refers to debts paid by the states of Rio de Janeiro (R$ 2.77 billion) and Minas Gerais (R$ 1.45 billion), in addition to other states and municipalities. In 2023, the Union still has not recovered any amount in counter-guarantees.