THE biggest street protests in two decades are adding to speculation that Brazilian President Dilma Rousseff will not come to the rescue of beleaguered billionaire Eike Batista.

Bonds due in 2018 from OGX Petroleo & Gas Participacoes, Mr Batista’s flagship oil producer, have tumbled 35c in the past month, the most in emerging markets, to 22c on the dollar, according to data. The securities have lost 76% of their value this year while OGX shares have tumbled 87%, the worst performance on the benchmark Ibovespa index.

The plunge has deepened as demonstrators rail against more than $13bn of spending on World Cup projects and demand better education and health services, reducing the chances that Ms Rousseff will risk further angering protesters by bailing out Mr Batista, said Credit Agricole.

State development bank BNDES accounts for almost half of the $5bn in loans to Mr Batista’s companies, Moody’s Investors Service said. Law firms are already arranging meetings with OGX and OSX Brasil bondholders to discuss Brazil’s insolvency law.

"Maybe if this whole problem was happening three months ago, there would be a much higher chance of an additional credit line from BNDES, or some sort of closer arrangement with" the state-owned oil firm, says Marco Aurelio de Sa, the head of fixed-income trading at Credit Agricole’s Miami brokerage.

"But not with the way nationwide protests took place in Brazil and the loss of popularity with the president," Mr de Sa said. "The market is already organising itself to try to save some of the residual investments. So the expectation of a bail-out is low or nonexistent."

Brazil’s central bank on Wednesday raised borrowing costs by half a percentage point to 8.5% in a bid to rein in the fastest inflation in 20 months that helped spark protests last month.

Mr Batista’s firms have "valuable assets" that are up for sale to fill "financial gaps", Trade Minister Fernando Pimentel said in Brasilia last week. The loans made by government banks to the companies had guarantees, he said.

BNDES is the most exposed lender in the country to Mr Batista’s companies, Moody’s said in a report on Monday.

The 4.9-billion real (R21.7bn) in loans to Mr Batista’s holding company EBX Group are equal to 10.1% of the bank’s tier 1 capital, Moody’s said. A July 1 report by Bank of America analyst Alessandro Arlant estimated the same value of exposure for BNDES.

"BNDES is the natural long-term financier in Brazil, but given that the pressure on the government is so large, it will look at other solutions instead of using more government resources," said Ceres Lisboa, an analyst at Moody’s in São Paulo.

Moody’s and Bank of America said that poor BNDES disclosure on lending to Mr Batista’s companies meant their estimates could be understated.

The Rio de Janeiro-based development bank declined to provide details on Mr Batista’s outstanding debt with the bank, citing bank secrecy laws.

Mr Batista’s companies contracted 10.4-billion real of loans with BNDES since 2007, according to the tally of the loans and their respective guarantees in response to a request by Bloomberg under Brazil’s freedom of information law. Of that total contracted, BNDES passed on default risk of 1.4-billion real to private banks, the bank said.

The extra yield investors demand to own Brazilian government dollar bonds instead of US Treasuries has swelled 82 basis points, or 0.82 percentage point, in the past two months, according to JPMorgan Chase. The gap narrowed four basis points to 244 basis points on Wednesday.

The cost of protecting Brazilian bonds against default for five years rose 90 basis points in that span, according to prices. It was little changed on Wednesday at 201 basis points. Credit-default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent if a borrower fails to adhere to its debt agreements.

Protests in São Paulo this week shut 16 of the city’s 31 bus terminals, reports said. Brazil’s largest union federations called for more countrywide strikes and marches as part of a "national day of struggle" on Thursday.

Initially sparked by outrage over a 20-centavo increase in São Paulo public-transit fares, the protests have spread across the country as Brazilians complain about everything from corruption to spending on World Cup stadiums and poor public services.

Ms Rousseff was booed at the opening game of last month’s Confederations Cup, a dry run for the World Cup that coincided with the protests.

With half a dozen lives lost in violent clashes with police, her approval rating fell to 30% from 57% in the steepest drop since former president Fernando Collor confiscated Brazilians’ savings in 1990 to tame hyperinflation.

The real hit 2.2645/$, leaving it down 9.4% this year, the most among 24 emerging-market currencies after South Africa’s rand.

Law companies Cleary Gottlieb Steen & Hamilton and Bingham McCutchen are arranging separate meetings with OGX and OSX bondholders.

"We’re getting a lot of inquiries about OGX and OSX, and presentations like this can be helpful to our clients as they assess strategy," said Bingham McCutchen’s Timothy DeSieno, a partner at the company.

The law firm is holding a presentation for clients in New York on Monday.

Cleary Gottlieb is hosting a conference call today to discuss challenges and risks faced by OGX and OSX creditors, according to Richard Cooper, a partner at the company. FTI Consulting and Pinheiro Neto Advogados are participating in both the Cleary Gottlieb call and the Bingham McCutchen meeting.

OGX said this week that it was not restructuring its dollar debt. A press official at EBX did not respond to an e-mailed request for comment on the prospect of government assistance.

Earlier this month, OGX said it was considering halting output at its only producing field and said it was scrapping three other offshore projects.

Mr Batista’s estimated fortune has shrunk about $30bn from its peak. While BNDES is unlikely to rescue him, it could pump new funds into the special-purpose vehicles he created to finance projects, said Ernani Torres, a former head of research at the bank, who is now a professor at Universidade Federal do Rio de Janeiro.

"The bank normally isn’t the instrument the government uses to save a company," Mr Torres said in Rio de Janeiro. "If BNDES enters with new money, it would be to save the projects, not the owner of the projects.

"Many of those projects are good. And BNDES’s money is with the project, not the owner of the project. That makes all the difference if EBX goes bankrupt."

Ms Rousseff had already before the protests demonstrated a reluctance to bail out Brazilian companies. She refused to provide assistance to Banco Cruzeiro do Sul, which was liquidated in the biggest corporate default in Latin America in a decade last year.

While BNDES has offered support in the past to companies in need, such as by converting some of JBS’s debt into shares in 2011 after the meat packer’s debt-driven expansion, bail-outs are not common practice for the bank, said Sergio Lazzarini, an economist at Insper Business School in São Paulo. BNDES said that it does not consider the JBS debt-for-shares conversion a "bail-out" operation.

"Given the recent protest and the sharp drop in Ms Rousseff’s popularity, the scenario is not very favourable for a bail-out," Mr Lazzarini said.