By Brazil Stock Guide – Iguá Rio de Janeiro S.A., a subsidiary of Iguá Saneamento, has called a bondholder meeting for November 24, 2025, seeking authorization to replace the minimum balance of its reserve account—linked to the first series of its fourth bond issuance—with bank letters of guarantee issued by institutions rated AAA in Brazil.
The proposal, valid until December 31, 2033 or until the completion of obligations under the second series, aims to unlock restricted cash and strengthen the utility’s liquidity position. As a countermeasure, the parent company Iguá Saneamento S.A. has committed to inject R$50 million (US$8.8 million) into Iguá Rio by the end of 2026, reinforcing its capital base.
Cash Efficiency Through Collateral Flexibility
The plan underscores Iguá’s push for greater financial flexibility without compromising investor protection. Under its current debt agreement, the company must maintain a cash reserve account to secure debt service obligations. The new structure would allow this requirement to be covered by bank guarantees, preserving liquidity for bondholders while freeing up funds currently locked in restricted accounts.
The waiver would only apply if the total value of the guarantees matches or exceeds the required minimum balance. Otherwise, Iguá Rio must replenish the difference in cash. Each guarantee would have a minimum two-year term, and the trustee could execute the guarantees in the event of default, non-renewal, or non-compliance before maturity.
Digital Assembly Led by Vórtx
Vórtx DTVM serves as trustee and will represent investors during the fully digital meeting, hosted on the TEN platform. Bondholders can vote in advance or participate in real time. Approval requires a simple majority (50% plus one) of the outstanding bonds in the first series.
Liquidity for Long-Term Investment
Iguá Rio operates the water and wastewater concession in parts of Rio de Janeiro’s metropolitan region, under a long-term contract established after the privatization of state utility Cedae. The company has been actively refinancing and extending its debt maturities to support a large investment plan focused on infrastructure upgrades and sustainability.
The proposal marks the first major test of confidence between Iguá and its bondholders since its 2023 issuance, which totaled about R$1 billion (US$175 million) in secured and guaranteed debentures. The board has recommended approval, arguing that the measure “preserves the strength of the guarantees while optimizing the company’s capital structure.”
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