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BNDES approves another early payment of 40B reais to Brazil's Treasury

Banco Nacional de Desenvolvimento Econômico e Social approved an early payment of over 40 billion reais in debt to the Treasury, the bank said Aug. 5 in a press release.

With the most recent installment, total returns to the state since 2015 amount to about 380 billion reais, Diário Comércio Indústria & Serviços reported. An additional 46 billion reais are expected to be paid in 2019 to fulfill the 126 billion reais objective for the year.

"This new advance is in line with the goal of accelerating returns to the National Treasury," BNDES said in a statement.

Upon taking over at the bank earlier this year, CEO Gustavo Montezano reportedly said that the outstanding 270 billion reais owed to the Treasury would be repaid within President Jair Bolsonaro's first term. The government is counting on returned funds from public banks, especially BNDES, to trim its own debt.

As its yearly disbursements fall to a 12-year low, BNDES has been using its reserve cash position to deleverage. It is also expected to sell about 100 billion reais in stockholdings in Brazilian companies.

Additionally, the bank owes the government 35 billion reais worth of a tier 1 hybrid instrument. Caixa Econômica Federal, also run by the government, holds a larger chunk of debt in the same instrument, of about 43.2 billion reais, a report by S&P Global Ratings shows.

As of Aug. 2, US$1 was equivalent to 3.89 Brazilian reais.