The Brazilian receivables investment funds market is moving briskly along. Currently selling shares is BMG FIDC Creditos Consignados IV, a transaction that originator Banco BMG is backed by personal loans to retirees and pensioners of the National Institute of Social Security, according to a source close to the transaction. Some of the loans backing the deal can be arranged over the phone, according to a report by S&P. The final maturity of the revolving deal structure is three years. The total size of the fund is capped at R$150 million ($62 million), with R$30 million corresponding to subordinated shares. Standard & Poor's has rated the senior shares brAAAf' on the national scale.
The lead arranger for the deal is Integral Trust, which has managed other FIDCs for BMG. This transaction marks the first time the originator has used loans to retirees as collateral. In the past, BMG backed deals with personal loans granted to employees of state-owned companies.
Elsewhere in the market, Rabobank is heard to be the sole lead and purchaser of an FIDC for wholesaler Martins and Banco Triangulo (Tribanco), said a source familiar with the transaction. Backed by trade receivables, the privately placed five year fund is sized at R$100 million, with a senior piece of R$80 million. Pricing on the senior shares is capped at 105% of the CDI benchmark rate. Fitch Ratings has rated that piece AAA(bra)' on the national scale. Concordia is the fund manager, while Banco Itau is the custodian.
The transaction jibes with Rabobank's two-year old strategy of funding clients via FIDCs. Other originators that have profited from this relationship with Rabobank are manufacturer Amanco, food company Sadia and Companhia Brasileira de Distribuicao, which owns supermarket chain Pao de Azucar. Currently, Rabobank is working on deals that would be marketed to investors, according to a source familiar with the bank.
Martins, one the country's leading wholesalers and deals in a variety of goods such as food, home electronics and construction material, receives its financial services almost exclusively from Tribanco, which also extends credit to the clients and suppliers of Martins.
Another private placement this year, Top Print Plus, came from Votorantim Celulosa y Papel (VCP), which, curiously enough, is said to be purchasing all the shares of an open-ended FIDC backed by its trade receivables, according to a source familiar with the transaction. Banco Bradesco was the structurer, fund manager, and custodian on the transaction. The company probably bought its own fund for the tax perks and to facilitate the distribution of dividends to its owners, the source said. The fund is open-ended, with some 85% of the offering ratied of AAA(bra)' from Fitch.
Treated like conventional investment funds, FIDCs are exempt from the financial transaction tax that hits other mechanisms for raising capital and, depending on whether the fund is open or close-ended, income taxes tend to be lighter as well.
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