Brazil's privately held deposit guarantee fund ruled out improving terms of a bond repurchase for Banco Cruzeiro do Sul, which runs the risk of bankruptcy, O Estado de S. Paulo newspaper reported on Monday.

The central bank seized the bank June. Bondholders of consumer lender Cruzeiro do Sul (CZRS4.SA), who stand to lose half of their investment under a repurchase program, have questioned the plan, in an indication that they will press for a sweeter offer. The plan requires the approval of 90 percent of bondholders.

Antonio Carlos Bueno, head of the FCG, as the guarantee fund is known, told the newspaper "there is no hypothesis of a renegotiation" of the tender, adding "there's is no room for bargaining: it's either this offer or this."

Cruzeiro do Sul was seized by Brazil's central bank on June 4 and put under the administration of the FGC the same day. Under terms of the plan the FGC agreed to repurchase $1.575 billion worth of Cruzeiro bonds maturing between September 2012 and September 2020 at an average 49.3 percent discount.

Private bondholders represent about 57 percent of Cruzeiro do Sul creditors, Thomson Reuters and FGC data showed. Some of them told Reuters last week that the discount they are being forced to assume is failing to include the benefits of a potential sale of the bank, such as tax credits.

The Cruzeiro seizure was the third in the last year and a half, a sign that years of rapid growth have resulted in deteriorating funding and liquidity conditions as well as a relaxation of credit risk and accounting controls among some mid-sized lenders.

Six rivals are already analyzing Cruzeiro do Sul's data, including its financial statements, before considering placing a bid, Estado said, citing FGC executives. Four of the banks have already met with the FGC to discuss the sale, and the other two have arranged meetings, Estado added.