Salomon Smith Barney is working on the final touches of a securitization for Brazil's Banco Nacional de Desenvolvimiento Economico e Social (BNDES). The deal, which is expected to hit the markets by the end of August, is backed by receivables originated by aircraft manufacturer Empresa Brasileira de Aeronautica SA (Embraer) but now owned by BNDES.
The receivables were generated by the sale of aircraft to American Eagle, the short-haul carrier for American Airlines.
Traditionally an issuer of plain vanilla private placements and 144A-type deals, BNDES is yet to close a securitization deal. "This is the first time that the BNDES is doing an offering of this kind," explained a source familiar with the transaction. "They have a portfolio of receivables which they are now trying to securitize, so it is important that they get a better understanding of this type of deal in order to be prepared for future transactions."
The deal will likely be offered under Rule 144A in the U.S., although that status and other details such as size and maturity will be decided in light of market conditions.
Meanwhile, Chase Securities has been advising BNDES on a similar deal backed by receivables generated by Embraer's sales in Europe. The European deal which is said to be for US$200m is more complex as it involves several jurisdictions (the U.K., France and Portugal) and will likely come later in the year. TH