Brazilian Federal Decree Sets New Rules for Municipal Debt Repayment

Decree No. 13.080/2026, published in the Official Gazette, establishes a special installment program for Brazilian municipalities, their autarchies and foundations, to renegotiate debts with the Union. Municipalities must submit a signed letter of interest and an authorising municipal law by 9 September 2026, indicating the chosen interest rate and assets offered for amortisation.

The program allows repayment in up to 360 monthly installments, with the first payment due on the 15th day of the month following contract signing. Debt balances will be adjusted using the Broad Consumer Price Index (IPCA) and interest rates are capped between 0 % and 2 % per year, conditional on meeting debt‑reduction targets and directing saved interest funds to local investments such as infrastructure, vocational education, sanitation, housing, public safety, climate adaptation and productivity. Pension debts owed to the Federal Revenue Service and the Attorney‑General of the National Treasury are excluded and have a separate deadline of 31 August 2026. The Secretariat of the National Treasury (STN) will manage the process, and municipalities may use up to nine payment instruments, including cash transfers and asset assignments.