After ten months in the works, Brazilian bank Bozano Simonsen recently structured a breakthrough deal for the Odebrecht Group, a petrochemical producer, that could set new standards for Brazil's local ABS market.

The transaction, a R180 million ($100 million) trade-receivables securitization for five polyethylene producing companies owned by Odebrecht, has many noteworthy elements.

It is the first local Brazilian transaction to feature a servicer - Banco Itau - that bears no relationship with the originator or the special purpose company. "We believe that this will be a benchmark transaction that will set the standard for future issuers," said Michael Iltit from Bozano Simonsen.

The deal comes from an SPV called Chemical Trust S.A. and is backed by a highly diversified pool of receivables. The notes have three-year bullet maturities and between 15% and 10% overcollateralization, the lowest level required in the local market.

Based on the strength of the underlying assets and the structure, the transaction received an Aa1 preliminary rating on Brazil's national scale from Moody's Investor Services and an A-plus from local rating agency SR, its highest rating.

The deal marks the first time that Moody's has applied its national Brazilian ratings, which were established earlier this year.

"We felt comfortable assigning the Aa1.br preliminary rating to the transaction because of the strength of the structure," explained Brigitte Posch, and analyst from Moody's in New York. "Certain elements such as the fact that the trade receivables that will go into the trust, will go through a strict eligibility criteria, the existence of an independent servicer and a thorough due diligence by KPMG, made us feel comfortable with the deal."

The transaction follows a much smaller R50 million deal from Odebrecht last year and sources say there is more to come. "Securitization provides competitive long-term funding," said Iltit. "It is a more efficient financing strategy than bank loans."

The transaction is currently being analyzed by the Brazilian Securities Commission known as the CVM and is expected in the market in the next 30 days.

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