Securitization used to be a dirty word in Brazil, with many investors intimidated by the risks of such a complex product and suspicious of promised double-digit returns in the local real currency. But since the creation of the fundos de investimento em direitos creditorios (credit receivables funds), FIDCs have become the vehicle of choice for non real-estate securitizations in Brazil, and foreign investors are flocking en masse to the market.
According to Uqbar, a local consultancy specializing in the sector, Brazil’s total securitization issuance was less than $25 million in 2002 but growth has been impressive.
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