Business · Economy · 19 hrs ago
Brazilian companies face heavy debt as interest-rate cuts may slow
In Brazil, companies are struggling under heavy debt and high interest costs as the country approaches another Lula government.
More than R$700 billion in company debt is being negotiated with banks and credit funds, according to a restructuring specialist.
A study found that 26% of publicly traded companies cannot cover interest costs from their operating cash flow.
Many businesses borrowed when interest rates were low, but the pandemic hurt demand and later rate increases made repayment more costly; the Selic rate rose from 2% to 15% in 2025.
The article says uncertainty over public finances and rising government debt could slow or halt future interest-rate cuts, putting further pressure on indebted firms.
Court-led and out-of-court debt restructuring cases have increased, and a consultant expects filings to keep rising in the coming months.
Brazilian companies face heavy debt burdens as high interest rates and uncertainty over public finances threaten to slow or halt further rate cuts.
More than R$700 billion in debt is being negotiated with banks and credit funds, according to restructuring adviser Ricardo Knoepfelmacher.
A study by his consultancy found that 26% of publicly listed companies cannot cover financial expenses from operating cash flow.
Manufacturing and retail account for nearly half of those companies and are among the most leveraged.
The article says the Selic rate rose from 2% in 2020 to 15% in 2025, contributing to a rise in corporate restructurings.
- Who
- Brazilian companies with high debt, including publicly listed firms.
- What
- They are under financial pressure as high interest rates may make rate cuts slower or stop them.
- When
- The article was published on November 1, 2026. It describes pressures that have built up since the pandemic.
- Where
- Brazil.
- Why
- High borrowing costs and uncertainty about public finances weigh on companies’ ability to service debt and may constrain interest-rate cuts.
This story does not have two clearly opposing sides.
Brazil’s interest rate entered a period of decline.
The Selic rate reached 2% a year, its lowest level in history.
The Selic rate rose to 15%.
Estadão published its report on corporate debt and the outlook for slower interest-rate cuts.
- Debt under negotiation
- More than R$700 billion
- Public companies unable to cover financial expenses from operating cash flow
- 26%
- Selic rate in August 2020
- 2% a year
- Selic rate in 2025
- 15%
- Industries accounting for nearly half of affected companies
- Manufacturing and retail
1 source
What people are saying
With nominal and real interest rates at very high levels for a long time, many companies have accumulated a volume of debt whose financial cost compromises cash generation.