Yields on Banco Master’s certificates of deposit (CDBs) jumped last week after the Central Bank of Brazil declined Banco de Brasília’s (BRB) bid to acquire the bank, prompting investors to sell amid concerns over a possible extrajudicial liquidation, Valor reported.
The delay could freeze funds until the country’s deposit insurance fund (FGC) intervenes, subject to regulatory payout limits.
On XP Investimentos’s platform, the main distributor of mid-sized bank debt, 296 Master CDBs were offered, including notes maturing in October at IPCA plus 45.02% and fixed-rate bonds due late 2025 to early 2026 yielding 35-37% annually.
BTG Pactual listed secondary CDBs at 20% for February 2027 or CDI +3% for April 2028, with the largest block at IPCA +13% maturing October 2026.
XP and BTG hold the largest client exposures — about BRL35bn ($6.43bn) and BRL10bn, respectively — while total Master CDBs outstanding are estimated at BRL60bn.
Investors are weighing losses to sell against potential gains from discounted purchases. FGC coverage limits remain BRL250,000 per CPF or CNPJ, up to BRL1mn over four years.
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