A surge in requests for bankruptcy protection among Brazilian small- and mid-sized corporate borrowers is setting off an alarm among private-sector banks, which could raise borrowing costs and restrict access to credit to fend off the practice, analysts at BTG Pactual Group said on Tuesday, Thomson Reuters News & Insight reported.

Brazilian regulators want to speed up a plan to pull power holding company Grupo Rede Energia SA out of bankruptcy protection in an effort to avert service disruptions. Administrators assigned to keep Rede Energia's companies running during the bankruptcy process are running out of funds, which could compromise basic upkeep and lead to spotty service, Edvaldo Santana, head of energy regulator Aneel said on Tuesday. The process should be concluded ahead of a court-mandated deadline in July, sources had told Reuters in late March.

The Brazilian government, concerned about systemic risk in the rapid growth of banking assets, will propose legislation to make shareholders, bondholders and depositors pay for rescuing troubled banks and shield taxpayers from the cost of bailouts, Reuters reported.

Brazil's central bank appointed a committee on Thursday to investigate the reasons behind last year's collapse of Banco BVA SA for an additional 120 days, giving potential buyers more time to consider acquiring the mid-sized lender, Reuters reported. The central bank seized the Rio de Janeiro-based bank on Oct. 19, citing deteriorating financing conditions and a breach of regulations. At the time, regulators gave the bank's administrators 90 days to find a buyer or face liquidation.

Opposition from foreign bondholders is unlikely to stop the takeover of Brazilian power holding company Grupo Rede Energia SA by two rivals, several sources with direct knowledge of the situation told Reuters. The process should be concluded ahead of a court-mandated deadline in July, and the buyout plan by Equatorial Energia SA and CPFL Energia SA may help limit losses for bondholders, the sources said. But bondholders are fighting a proposal that would restructure Grupo Rede's debt and cut the value of their holdings by 85 percent.

Brazil’s consumer-loan default rate fell in November for the first time in five months as the government pushes banks to reduce interest rates, Bloomberg reported. The consumer default rate fell to 7.8 percent from 7.9 percent in October, the central bank said in a report distributed today in Brasilia. Interest rates to consumers fell to a record 34.8 percent.

The majority of creditors of Independencia, an insolvent Brazilian meatpacker, approved a restructuring plan of the company's debt today, removing one of the last remaining obstacles for the firm to be taken over by its larger rival JBS, Reuters reported today. JBS started out as a family butcher in Brazil and became the world's largest beef producer by assuming control of smaller firms, a strategy it has recently resumed. Read more.

Centrais Eletricas do Para SA, a Brazilian utility know as Celpa that was acquired this month by Equatorial Energia SA, filed for Chapter 15 bankruptcy protection in New York, Bloomberg reported. The company, based in Belem, Brazil, listed both debt and assets of more than $1 billion in documents filed today in U.S. Bankruptcy Court in Manhattan. Chapter 15 protects foreign companies from U.S. lawsuits and creditor claims while a company reorganizes abroad. Celpa is asking the U.S.

Brazilian state-led power company Eletrobras said on Tuesday that it plans to take over Cia de Eletricidade do Amapa (CEA) to help restructure the bankrupt northern Brazilian utility and recover debts, Reuters reported. The companies and the government of Amapa, which controls CEA, agreed to sign shareholder and management agreements aimed at restoring CEA to financial health, Rio de Janeiro-based Eletrobras said in a statement on Tuesday. Amapa authorities will receive financing from Brazil's federal government to pay off CEA's debts to Eletrobras and other suppliers.

Police in Sao Paulo said on Monday they had arrested the former head of bankrupt Brazilian lender Banco Cruzeiro do Sul on charges of money laundering and crimes against the country's financial system and capital markets, Reuters reported. Last month Brazil's central bank ordered the liquidation of the bank and its subsidiary, Banco Prosper, after seizing the lender on June 4 due to fraud-related losses and after administrators failed to find firm takeover bids. The liquidation of the bank represents one of the biggest collapses in the country's banking system in years.