Government paid BRL 1.15 billion in state debts in February

In total, since 2016, the federal government has made the payment of 43.46 billion reais in order to honor the guarantees of credit operations.| Photo: Marcello Casal Jr./Agência Brasil

In February, the Union paid 1.15 billion reais of debt guaranteed by subnational entities, according to information published this Monday (7) by the National Treasury Secretariat. R$818.64 million was paid for outstanding payments in Minas Gerais, R$255.24 million in Goiás, R$66.76 million in Rio de Janeiro and R$5.13 million in Rio Grande do Norte.

According to the report on guarantees honored by the Union in credit operations, during the year the Union honored 1.55 billion reais of guaranteed debts of the States. In total, since 2016, the federal government has paid 43.46 billion reais to honor guarantees for credit operations. The guarantees represent the assets offered by the Union – represented by the National Treasury – to cover possible defaults on loans and financing of States, municipalities and other entities with national banks or foreign institutions, such as the IDB, IBRD and the World Bank.

As guarantor of the operations, he is informed by the creditors that a certain part of the contract has not been settled. If the entity fails to meet its obligations within the specified time, the Treasury compensates the defaults, but takes the amount covered by the blocking of ordinary federal transfers, in addition to preventing new financing.

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