President Luiz Inácio Lula da Silva sanctioned this Friday (26) the law that creates the Development Credit Letter (LCD). The fixed income security, subject to tax exemption for individuals, aims to finance infrastructure investments in Brazilian industry. 
The LCD may be issued by the National Bank for Economic and Social Development (BNDES) and by development banks authorized by the Central Bank, which may issue up to a limit of R$10 billion per year with the paper. The project presented by the federal government that establishes the LCD was approved this year by the National Congress.
The Vice President and Minister of Development, Industry, Commerce and Services, Geraldo Alckmin, explained that the LCD complements two other existing credit titles: the Agribusiness Credit Letter (LCA) and the Real Estate Credit Letter (LCI), which are also issued by the private sector to finance activities in these sectors.
“We now have the LCD, which is for development. It covers industry, commerce and services and will be issued by development banks. The main one is BNDES,” he said.
According to Alckmin, the LCD will stimulate the sale of bonds, because, for individuals, the Income Tax will be zero and for legal entities, the tax will be reduced from 25% to 15%.
“This benefit goes directly to the borrower, nothing to the bank. So, the borrower, mainly the industry, but also the trade and services, will have cheaper credit, probably between 1% and 1.2% to 1.3% cheaper,” said Alckmin.
