© 2025 Arizent. All rights reserved.

In Brazil, tuition receivables loom locally and CSN prices abroad

Brazilian local firm Unitas is heard working on a tuition receivables deal for UniverCidade in Rio de Janeiro. The paper would amount to R$40 million (US$13 million) and probably have a term of five years, according to a source familiar with the transaction. Apparently, the structure would resemble a transaction that Unitas handled last year for the Universidade Luterana do Brasil (Ulbra). It is understood to be a debenture, a vehicle that has lost popularity to the more tax-friendly receivable investment funds (FIDCs).

Meanwhile, catering to certain high net-worth clients, asset manager Intrag DTVM has issued a small R$11.8 million (US$3.7 million) FIDC backed by Chemical FIDC, which is, in turn, backed by trade receivables originated by petrochemical giant Braskem. "We did this to give [retail investors] the comfort of liquidity," said Alexandre Zakia, senior managing director of Banco Itau, which controls Intrag and also provides custodian services on the deal. The underlying FIDC is closed-ended and has a three-year maturity, which is too long for retail investors, given that a secondary market has yet to emerge, Zakia said. In contrast, the fund of fund will enjoy liquidity provided by Itau.

On the cross-border front, steel producer Companhia Siderurgica Nacional (CSN) priced a US$161.95 million securitization of export receivables on June 3. The deal priced at 7.427% on a quarterly basis and 7.496% on a semi-annual basis. The spread over five-year treasuries is 350 basis points, according to a company official. The legal final maturity was eight years and the average life was five. Citigroup was sole bookrunner and BNP Paribas was joint lead. The deal was upsized from US$150 million, another sign that investors are welcoming ABS out of Latin America. Fitch Ratings gave the deal an investment-grade cusp rating of BBB-'. In a departure from two ABS issued last year off the same program, Shearman & Sterling replaced Clifford Chance as the cross-border legal counsel for the arrangers, according to a source close to the deal. (For further details, see ASR 5/31/04, p. 20)

Finally, rival Gerdau Acominas capped its own export deal at US$128 million, following talk that the company might add on another US$5 million for an investor looking at the transaction. Apparently, the investor didn't buy in (see ASR 5/21/04, p. 20).

Copyright 2004 Thomson Media Inc. All Rights Reserved.

http://www.thomsonmedia.com http://www.asreport.com

For reprint and licensing requests for this article, click here.
MORE FROM ASSET SECURITIZATION REPORT