Brazilian Banks Agree to $20B Loss in Novonor Debt Swap

Five Brazilian banks, including Itaú, Bradesco, Santander, Banco do Brasil, and BNDES, agreed to exchange R$20 billion in Novonor loan losses for uncertain derivative prospects. The banks had previously made loans to Odebrecht, now Novonor, and will sell the R$20 billion in bad loans to a fund managed by IG4 Capital. The agreement comes after five years of negotiations and follows Novonor's entry into receivership in 2019, seeking to restructure R$98.5 billion in debts and loans between group companies.