Issuance of domestic Brazilian securitizations took a 64% dip in the second quarter from the same period last year, totaling R$1.13 billion ($517 million), according to industry consultancy Uqbar. That followed a vertiginous leap of 1190% in the first quarter, leaving the first half of the year still ahead of the same timeframe last year by 30%.
While issuance slid, the volume of securitizations registered during the quarter dwarfed the amount placed, which appears to augur well for plentiful supply in the rest of the year, despite presidential elections in October. The total volume registered with Brazil's Securities Commission the CVM hit R$2.4 billion.
Uqbar blames some of the slowdown in issuance on a hearty appetite for unsecured fixed-income securities, which gave potential originators an alternative to the more involved route of structured finance.
The average tranche size of issued securities also shrank in 2Q06 from a year earlier. The 57 tranches issued from receivables investment funds (FIDCs), the vehicle of choice for non-real estate securitizations, averaged R$15.2 million during the most recent quarter, a drop from the average tranche size of R$51.3 million last year. Meanwhile, the average tranche of Certificate of Real Estate Receivables (CRIs) also fell.
FIDCs took the lion's share of issuance in the second quarter, accounting for 76.6% of volume, against 23.4% for CRIs.
Among the developments in the second quarter, Banco ABN Amro Real debuted as an FIDC administrator, a role akin a trustee, by its involvement in one fund. There were also greenhorns making an appearance on the registration roster. Structurers that listed a deal with the CVM for the first time included Acrux Administracao de Recursos, BNC Securitizadora de Creditos, and Morgan Stanley Dean Witter Administradora de Carteiras.
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