A first-time Brazilian issuer is prepping a receivables investment fund (FIDC) backed by trade receivables. Flour miller and poultry producer Predileto is aiming to raise up to R$50 million (US$16 million) in the market via fund manager Oliveira Trust. The arranger of the transaction, local shop Banco Santos, is an ABS neophyte as well. Fitch Atlantic Ratings has given the senior shares of the deal, sized at up to R$39.8 million (US$13 million), a rating of A+(bra)' on the national scale.

The senior chunk stands on a subordinated piece of no less than 17% and the obligors are a diversified bunch, according to Fitch Atlantic senior analyst Jayme Bartling. The senior shares have a tenor of four years, but the structure matures in five years. The custodian for the deal is Banco Itau, while the payment orders will be filtered through collection agent Banco do Brasil. In FIDCs, the custodian is generally responsible for selecting receivables.

Most of the trade receivables stem from Brazilian customers, but about a tenth are linked to poultry export contracts. A mechanism is in place to mitigate the exchange-rate risk of the export receivables. The country is the third largest flour miller and eight largest poultry producer in the country.

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