A Brazilian regulation that goes into effect today ratchets up the default probability of mezzanine tranches in domestic ABS, said Moody’s Investors Service in a release.

The rule discourages issuers from supporting their receivable investment funds (FIDCs) through asset buybacks and substitutions. FIDCs are the most popular vehicle for securitization in Brazil.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.