The structure of Brazilian receivable investment fund (FIDC) Pao de Acucar has gone through changes that illustrate the flexibility of a vehicle that is fast gaining ground. A shareholders' meeting on Feb. 18 decided to increase the concentration limits of certain receivables in the collateral and to replace fund manager Intrag DTVM with Concordia, among other modifications. Fitch Atlantic Ratings deemed the overall impact of the moves neutral and kept the rating at AA(bra)' on the national scale for the R$400 million (US$138 million) in senior shares. Rabobank structured the deal and initially bought all the shares.

The substitution of the fund manager, according to a source familiar with the deal, was for "administrative" reasons. An official at Intrag declined to comment. A unit of Banco Itau, Intrag was the manager of a Parmalat fund that recently folded amid the fraud scandal that contaminated just about every deal connected with the dairy multinational. However, being dropped from Pao de Acucar is unlikely to be any kind of fallout from that debacle, given that Parmalat investors were pleased with how Intrag consistently kept them abreast of the problems facing the company. Replacement fund manager Concordia has a track record in the field of FIDCs, as the manager for a fund originated by foodstuffs company Sadia.

Pao de Acucar securitizes a variety of receivables generated by Companhia Brasileira de Distribuicao (CBD) and its subsidiaries in the retail sector, including the namesake of the fund. Among other changes to the FIDC was an increase in the cap on credit card receivables backing the deal to 70% from 55%. While pre-dated checks add diversity to the asset pool, they are more cumbersome than credit cards to monitor, according to a source on the deal. In addition, changes in consumption patterns have slightly increased the importance of credit card use at the eligible stores.

Other changes included a delay in the amortization of series A and an increase in the targeted return from 103% of CDI to 105%.

Meanwhile, two funds structured by Banco Votorantim launched and closed on Feb. 27. High demand compressed the targeted yield for both transactions, according to a source close to the deals. A R$125 million (US$43 million) senior tranche of a FIDC for petrochemical player Companhia Petroquimica do Sul (Copesul) closed at a target yield of 106% of CDI from 106.5% of CDI originally. At the same time, a R$150 million (US$52 million) senior tranche for power producer CPFL Piratininga came at 104.5%, well inside the projected pricing of 107% of CDI. That deal, however, was halved from an original R$300 million. The originator has not decided whether to go ahead with the second half, the source said.

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