Use of precatories in debt negotiation with the Union raises demand for bonds

The use of federal precatories in active debt transaction agreements with the Federal Government increased the demand of companies and law firms for these bonds. The discount on the assignment of these rights has been in the range of 30% to 50%, according to tax lawyers and companies that participate in this market.

The National Treasury has proposed to taxpayers the possibility of using these rights to reduce debts with the government.

One of the advantages of using third-party payment documents in these operations is that the company can buy it at a discount and write off the debt at face value, which, in practice, generates an additional discount to pay off the debt with the Federal Government.

Last year, Congress approved the federal government’s proposal that amended the Constitution to create a ceiling on the payment of precatories and RPVs (small-value requisitions). In December 2021, the federal stock of these bonds totaled BRL 100 billion. It currently stands at R$ 79 billion, according to data from the National Treasury.

Before the PEC, federal precatories of any amount were negotiated at a discount close to 80%. After the change in the Constitution, the discount for large amounts reached more than 50%. The government itself proposed to receive the precatories with a discount of 40% for those who do not want to be in the receiving queue, but this device was not regulated.

The constitutional amendment also provides for alternatives for the use of precatories, such as paying off debts in installments or registered in active debt, buying public real estate, paying concessions or acquiring equity interest in privatizations. Most options still depend on regulation.

The use of these rights for amortization of tax debt, including interest and fines, is already provided for by law. The National Treasury also regulated the use of the precatory in the tax transaction, which is the direct negotiation with creditors registered in the active debt.

According to the PGFN (Attorney General of the National Treasury), the use of federal precatories, own or from third parties, is allowed to amortize or settle the debt balance in these negotiations.

Before the amendment, the federal precatorios market was more restricted, since all bonds issued in one year were guaranteed payment in the following year. Therefore, the discounts were small, says Pedro Siqueira Neto, a partner in the tax area of ​​Bichara Advogados.

The approval of the PEC (Proposed Amendment to the Constitution) of the Precatórios generated uncertainty about the payment term and increased the discount. Especially for those of high value, who are at the end of the line created after the enactment of two amendments that addressed the issue.

“The market is much more heated, especially in tax transactions. Today, when you start an individual transaction with the Attorney General’s Office, one of the benefits it brings to the conversation is the possibility of using precatories. With that, you create a market and create also demand”, says the partner in the tax area of ​​Bichara Advogados.

He states that in 80% of the transactions there is an opportunity to use the precatory, which also depends on the success of the negotiation to acquire these rights. There are also negotiations with the aim of using federal court documents for other types of tax compensation, such as amortization of outstanding installments (Refis).

“Until the constitutional amendment, there was no federal precatory market, as there were for the municipal and state ones. You didn’t have a discount, because it was issued in one year and, in the following year, it was paid with certainty.”

Lawyer Mírian Lavocat, a specialist in tax law, claims to have received, but refused, proposals to acquire the precatories belonging to her office, arising from fees and a success rate in some actions.

Lavocat says he expects a greater heating of the secondary market in view of the expectation of regulation of other forms of use of these bonds. It also highlights the change that linked the correction of these rights to the basic interest rate, currently at 13.75% per year, which guarantees profitability of more than 8% above expected inflation.

“I have no interest in selling the ones I have in the office, for fees for bankruptcy and negotiations with clients in the success. I see the increase in Selic and I see the possibility of business, especially for grants, corporate acquisitions and payment of concessions, to improve still plus my credit.”

The expectation of putting the grant payment into practice is another point that has aroused the interest of concessionaires, which have already started to carry out surveys in this market.

Daniel Costa, managing partner of Mercatório, a company specialized in the negotiation of these assets, says that federal precatories of greater value, above R$ 10 billion, for example, were once again sought for tax compensation for companies.

In this case, there is a preference for those that have just been shipped and that must not be paid before 2024, which guarantees a greater discount on the acquisition. Precatórios of smaller value and expectation of faster payment are demanded, mainly, by investment funds.

“In the last four months we started to receive a lot of people looking for these high-value precatories to be able to carry out tax compensation operations, and their value has gone up. It hasn’t changed much, but it has improved”, says Costa.

“In a precatory that was supposed to be paid this year, but will be paid next year, the discount is 20%. It is very difficult for someone who is going to use it for compensation to be willing to pay this discount. invest.”