Capital Markets | New Type of Debentures – Infrastructure Debenture – Is Created in Brazil, Which Will Benefit Issuers and Investors

New Brazilian law creates a new type of debenture bond, known as Infrastructure Debenture.

The new type complements structured debenture – that already exists in Brazil – now with points of improvement that make it even more attractive to other types of investors, such as pension funds, financial institutions and insurance companies, given the objective of allocating resources from this type of investment. 

Another benefit lies in the tax field given that issuing companies will be able to deduct the interest paid from the calculation of net profit, in addition to being possible to deduct 30% of the interest on debenture from federal taxes.

For investors there are also positive tax issues, since for individual investors the Income Tax charge for those who allocate investments in infrastructure debenture may be 15%, depending on the time of application of the resources and the investor’s profile. A benefit compared to other brazilian investments, but not compared to structured debenture, which are exempt.

Fundraising must occur exclusively to obtain resources destined for priority infrastructure or research, development and innovation projects, and the issuance of debenture must be carried out by December 31, 2030. Therefore, there is a window of opportunity for the next few years to be taken advantage of by the market in Brazil.

The legislator’s expectation is that infrastructure debenture will boost infrastructure investments in Brazil by more than R$ 1 trillion.


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