By Brazil Stock Guide – Ambipar Participações e Empreendimentos S.A. (B3: AMBP3; NYSE: AMBP) shot to prominence in the international debt market in February 2024 with the largest private green bond issuance ever by a Brazilian company: $750 million due in 2031. The deal, hailed as a landmark in sustainable finance, followed recommendations from João Arruda, then a director at Bank of America.
According to local outlet PlatôBR, Arruda advised Ambipar to hedge the entire issuance through a currency swap, shielding it from swings in the dollar. That move converted the foreign-currency debt into reais, plus fees, making payments more predictable against the company’s cash flow.
Second bond deal and debt reshuffle
In February 2025, Ambipar returned to the market with a $493 million issuance due in 2033. Roughly US$200 million of the proceeds went toward early repayment of the first notes. The company was left carrying two large debts: $550 million maturing in 2031 and $493 million maturing in 2033.
By then, Arruda had become Ambipar’s CFO. He moved the swap on the 2031 bonds from Bank of America to Deutsche Bank and arranged a new swap for the second deal.
Addendum sparks crisis
The breaking point came on August 18, 2025, when Ambipar signed an addendum with Deutsche Bank that changed collateral requirements on the 2031 bonds. The new structure, known as PIK (Payment-in-Kind), tied the derivative to the bonds’ performance in the secondary market.
In practice, Ambipar was required to post additional collateral whenever bond prices dropped. What was meant to provide protection instead magnified risks, drained cash reserves, and fueled further declines in asset values.
CFO exit deepens mistrust
The situation escalated on September 19, 2025, when Arruda resigned as CFO. His abrupt departure led to the cancellation of investor meetings he had organized, stoking fears of disarray and weak governance.
The market reaction was swift: Ambipar’s global bonds, local debentures, and shares in both São Paulo and New York plunged. The combination of tumbling prices and automatic margin calls pushed the company into a downward spiral that now threatens its liquidity and could force a bankruptcy filing within 30 to 60 days.
Under suspicion
The episode raises questions over Deutsche Bank’s role in structuring the deals and over Arruda’s judgment, given his shift from Bank of America adviser to Ambipar’s finance chief, where he oversaw the high-risk bets now imperiling the company.
The Ambipar case highlights not only the dangers of complex debt structures but also potential conflicts of interest and clauses that can turn supposed protection into a trap.
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