At press time, Brazil's Furnas Centrais Eletricas was on the verge of closing its R$334 million ($116 million) receivables investment fund (FIDC), but the hulking power producer is not the only originator powering what's become a formidable ABS machine. Manufacturers Gradiente and Amanco are currently taking investors for their respective FIDCs; Banco Bonsucesso closed its own fund Oct. 14; Banco BMG is heard returning with a third fund; and auto-loan specialist Omni recently closed the sixth and last series of an FIDC.
Led by Banco Santander, the Furnas FIDC was scheduled to close subscription on Oct. 15. Investors were not expected to snap up the entire deal at the closing date, meaning Santander would probably underwrite a portion. Typically, closed-ended FIDCs launch and close within expansive time frames, often of several months. Eager to receive the proceeds, Furnas set a short horizon for funding, which squeezed the road show, fund launch and close into a two-week period. This did not leave enough time for many pension funds to buy in, since approval for investments takes longer, according to a source close to the transaction.
Nevertheless, investors are expected to purchase a significant chunk, with roughly one hundred attendants cramming into the second stop of the roadshow in Rio de Janeiro on Oct. 6.
Backed by three different loans (see ASR 10/11/04), the transaction is being priced at 50 basis points over the benchmark Selic, currently at 16.25%. This marks the first time an FIDC is offering a spread to the Selic as opposed to the CDI rate. "We think it will be used more in the future," said a source close to the deal. While the Brazilian Central Bank sets the target Selic target, the CDI is the average of interbank deposit rates.
Furnas has a 4.5-year tenor and a rating of Aa3.br' on the national scale by Moody's Investors Service. A utility titan by any standard, Furnas operates Itaipu, the world's largest hydroelectric project.
Meanwhile, electronics manufacturer Gradiente currently has a fund open for subscription. Launched Sept. 15, the fund is timed to close Dec. 15. A cap of R$100 million has been set on the senior shares and R$25 million on a subordinated portion. Rated brAAf' by Standard & Poor's, the senior chunk has a final legal maturity of Sept. 2007. Units of Banco Itau are arranging, managing and acting as custodian for the transaction, which has a target yield of 112% of CDI on the senior portion.
Collateral for the Gradiente FIDC is comprised of a revolving pool of trade receivables. The obligors are by and large companies that run sprawling retail networks throughout the country. They include Casas Bahia, Lojas Insinuante, Carrefour Comercio e Industria, Globex Utilidades, and Lojas Americanas.
Also heard to be in the process of subscription, Amanco is shooting for a senior portion of R$48 million and subordinated shares of R$12 million. Arranger Rabobank is understood to be snapping up the entire fund. Nevertheless, while the fund launched Aug. 27, the amount of receivables has probably not reached the point at which the fund can close off issuance, said a source close to the deal.
Pricing for Amanco is set at 110% of CDI. Fitch Ratings has rated the deal AAA(bra)' on the national scale. The final legal maturity is January, 2010. Anchoring the deal's top-notch rating is a highly diversified obligor base of no less than 7,000 customers.
Elsewhere in the FIDC market, Banco Bonsucesso closed an FIDC for a total R$50 million on Oct. 14. Sized at R$38.5 million, the senior portion priced at 109% of the benchmark CDI rating. The maturity is three years.
Backing the transaction are personal loans that Bonsucesso makes to government employees. A major strength of the deal is the fact that the loan payments are automatically deducted from the debtor's paycheck and sent directly to Bonsucesso. As such, Moody's has rated the fund Aaa.br' on the national scale.
Meanwhile, Banco BMG is eyeing a third FIDC, after having recently closed R$330 million in an FIDC that had been upsized twice, according to a source close to the deal. Another repeat issuer, auto-loan provider Omni, recently closed the sixth and last series of an FIDC for a total R$80 million
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