Brazil: a changing landscape for private credit

Oct 29, 2025

Mihai Florian, Senior Portfolio Manager for EMD, discusses a recent trip to Brazil, where he met with local corporates, fund managers, and lawyers. Brazil is one of the larger markets in private credit, where we continue to see demand for capital.

Key takeaways

  • An increasingly compelling market: macro and political uncertainty is pushing borrowers offshore, while the local restructuring environment and judicial reorganisation process is evolving and becoming more sophisticated.
  • Shifts in private credit: activity in the Brazilian corporate market is increasingly characterised by the contrast between the ‘haves’ (large healthy corporates with low leverage and exports or commodity-driven businesses) and the ‘have-nots’ (typically highly-leveraged businesses in industries that are experiencing a cyclical downturn).
  • Local credit opportunities: we have seen increased activity locally in a variety of instruments from non-performing loans (NPLs), to claims (precatorios) to performing private credit (for performing, high-quality credits) and DIP-style financings (rescue financings for stressed and distressed companies).
  • An opportunity for active managers: high local rates, coupled with noise around some names, has exacerbated volatility in the local markets and is creating opportunities for active managers such as ourselves.

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