The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Brazilian structured finance awaits real estate takeoff

Brazilian structured credit based on such underlyings as consumer loans, auto finance and trade receivables is in rude health but the underdeveloped RMBS and CMBS market will only take off with greater supply. Even then, investors may be wary of buying it. Rob Dwyer reports from São Paulo.

IN THE FIRST half of 2010 the Brazilian structured finance market has flourished in a benign domestic economic climate. As José Olympio Pereira, co-head of investment banking at Credit Suisse in Brazil says: "Brazil’s country risk premium is lower than that of Greece, Portugal, Spain and Italy – the tables have turned. Brazil’s macro indicators are better; we have a lower debt to GDP ratio, a primary surplus, lower deficits and more currency reserves." Issuance of fundos de investimento em direitos créditos (FIDCs), the dominant structured finance instrument, has grown, driven by expansion in the diverse range of underlying assets: consumer loans, auto loans, trade receivables and other less common asset types. Such diversification characterizes and distinguishes Brazilian structured credit as much as the flip-side – the small number of the RMBS and CMBS real estate-based transactions, in Brazil certificados de recebíveis imobiliários (CRIs), that typically dominate structured credit in other markets.

Standard & Poor’s reports that in the first six months of this year the number of new Brazilian structured finance transactions that it rated increased by 75% on the same period of 2009. It attributes this strong performance to the country’s healthy GDP growth, stronger consumption levels and higher credit availability.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree