The local unit of Fortune 100 telecommunications monster Motorola Inc. is scheduled to roadshow this week a receivable investment fund (FIDC) worth around R$400 million ($176.7 million), with regulatory approval to upsize it to R$540 million should demand be hearty enough. The deal signals the first time underwriter Rabobank is selling an FIDC, according to a source close to the transaction. Prior to this offering, the bank was heard to have underwritten all of the FIDCs funds it has arranged for corporate clients as a way to provide tax-friendly funding, one of the main advantages of FIDCs versus other forms of financing. Fitch Ratings has rated the transaction AA-(bra)'. The maturity of the initial tranche is three years.

Collateral consists of mobile device sales to service operators and directly to consumers. Among operators, Brasilcel unit Vivo, Tim and Claro Commu-nications account for the bulk of Motorola Industrial's handset sales. A merger of Portugal Telecom and Telefonica Moviles, Vivo is the largest telephony operator in the Southern Hemisphere and serves upwards of 26 million clients in Brazil, according to the corporate website. Tim, meanwhile, is the only GSM operator with coverage in every Brazilian state. Claro, for its part, is owned by America Movil, which is, in turn, controlled by Mexican billionaire Carlos Slim.

Enhancing the fund is 3% subordination and a 7% discount on the collateral. The administrator of Motorola's FIDC is BEM, the asset management division of Banco Bradesco, which is doubling as the deal's custodian. Mattos Filho, Veiga Filho, Marrey Jr. E Quiroga provided legal counsel.

Motorola made Brazil its South American manufacturing base in 1996. Motorola Industrial has invested $492 million since 1995.

Elsewhere, the pension fund of the state of Rio de Janeiro is taking the FIDC route to capitalize itself before the end of the year, according to a source close to the transaction. The pension fund is looking for up front cash, as the state government is looks to boost pension coffers in advance of next October's presidential elections, according to a source close to the deal. "That's why it only has a 13-month period," he said. The fund could launch as early as this month.

The senior tranche is R$600 million ($265 million), with the subordinated shares possibly reaching up to R$1.2 billion. Fitch has rated the senior piece AAA(bra)' on the national scale, while the subordinated shares are unrated. The fund, with a 13-month tenor, makes a bullet payment upon final maturity.

Collateral will be comprised of drilling royalty receivables owed Rio by offshore oil operations that lie within the state's jurisdiction. Petroleos Brasileiros runs virtually all of the 39 rigs covered in the deal. Rio has transferred the rights to the pension fund.

Mellon Servicos Financeiros will administer the fund, while Equity Capital Partners will be manager and Deutsche Bank Securities is the custodian.

(c) 2005 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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