Banco Central do Brasil is in the market with a $250 million remittance transaction expected to close in the second or third quarter, sources say.
Merrill Lynch has recently been awarded the mandate, and while no rating agency has been assigned to tackle the deal just yet, the rating agencies seem to be anxious about getting their hands onto this one.
Although the details of the structure remain to be seen, sources expect that a trust will be established in Banco Central do Brasil in Japan. Brazilians working in Japan can then deposit yen or American dollars into the trust and the money will then be transferred to the assigned account in Brazil in real. According to sources, the deal may follow a similar structure to a deal completed by Isbank in Turkey.
Additionally, the deal will be similar to the Banco de Credito de Peru (BCP) and Banco Nacional de Mexico (Banamex) electronic wire transactions, (ASR 1/8/01 p.1) however, the collateral in this deal is worker remittances while the collateral in the BCP and Banamex deals were business-to-business remittances.
The deal has been delayed for various reasons; however, one source said it is a matter of "getting things in order" and approvals rather than as a result of factors such as credit constraints. Another source noted that the transaction could be a bit complicated in that there are two jurisdictions involved.