Brazilian Precatorios in 2026: The EC 136/2025 Entry Window and ADI 7873

Executive context for international investors

This article explains why Brazilian precatorios may offer a tactical entry window in 2026 after EC 136/2025.

This is a Lummen investment viewpoint, not a statement that all current market prices already reflect the same downside assumptions. Any live claim requires dated market evidence, claim-level diligence, and a reproducible entry-price model.

The key point is not only legal change, but legal change translated into valuation variables: time-to-cash, payment capacity, and accrual profile.

What EC 136/2025 changed in economic terms

EC 136/2025 changed the pricing framework through three channels:

• Chronology sensitivity: the constitutional budget cut-off is now February 1. A requisition presented on February 1, Y goes to chronology Y+1; if presented on February 2, Y, it moves to Y+2.
• General-regime capacity constraints: Article 100, Sections 23-24 allows subnational entities in the general regime to operate annual payment capacity by RCL/stock parameters, regardless of annual inflow volume.
• Special-regime stock dynamics: removal of the hard stock-clearance deadline and migration to capacity-based annual payment logic reduced visibility on stock extinction timing.

In parallel, ADCT Article 97, Sections 16-16A (IPCA + 2% simple interest per year, Selic-capped) and immediate-application effects over already-registered unpaid stock changed carry assumptions.

Portfolio consequence: an underwriting model should stress longer duration, payment capacity, and accrual assumptions. Whether a quoted discount compensates for those variables must be tested with dated evidence rather than assumed.

STF structural precedents relevant to EC 136

For valuation, two constitutional precedent cycles are central:

• EC 62/2009 -> ADIs 4357 and 4425 (merits judgment on March 14, 2013; modulation on March 25, 2015), with invalidation of structural provisions that compressed creditor economics.
• EC 113/2021 and EC 114/2021 -> ADIs 7047 and 7064 (judged in 2023; judgments published on February 9, 2024), with relevant invalidations and extraordinary-budget normalization for overdue federal stock.

In this latest cycle, STF reopened the constitutional path for payment of overdue federal liabilities, and the National Treasury opened an extraordinary credit of R$ 93.143 billion in December 2023 to fund precatorios.

Institutional reading: when constitutional design over-compresses creditor rights, STF has historically recalibrated the regime.

Why ADI 7873 matters for asymmetry

ADI 7873 (Brazilian Bar Association, filed in 2025) challenges EC 136 provisions that can affect duration, accrual, and payment capacity.

This can create an asymmetry setup under a stated entry-price model:

• downside can be reflected in the acquisition price, but that conclusion requires contemporary quotes and documented assumptions;
• upside may materialize if STF partially normalizes the most punitive assumptions on timing, stock treatment, or accrual dynamics.

Allocation takeaway for global investors

For disciplined allocators, this setup may offer tactical diversification and potential legal convexity, provided underwriting is robust at the jurisdiction and claim level.

Execution quality remains decisive: legal due diligence, chronology mapping, and entry-price discipline determine whether legal optionality becomes realized return.

Sources

• EC 136/2025 (Planalto)
• EC 62/2009 (Planalto)
• STF official news on EC 113/114 ADIs
• National Treasury: extraordinary credit for precatorio payments
• Brazilian Bar Association note on ADI against EC 136