Brazil’s FIDC maintains momentum
When the investment trust structure appeared four years ago, the securitization market jerked into action and local banks jumped on a growing opportunity. Now foreign banks are taking a fresh look at the market, eyeing the rich pickings that are emerging from securitizing receivables for corporates, banks and states. Chloe Hayward reports from São Paulo.
A VISIT TO the glass tower blocks of the famous Faria Lima street in São Paulo reveals that the offices are filling up fast. Foreign banks are investing in Brazil with vigour as they expand their operations to access opportunities in Latin America’s biggest and most exciting economy. "Going down this road there are a large number of new commercial buildings. Two years ago the few that were here were only 50% occupied, now they are 100% filled," says Pedro Bastos, CEO of HSBC in Brazil, as he triumphantly gestures out of the HSBC tower, just one of the blocks on the street.
But why is this happening now? It would seem that the equity market boom is in full swing but many banks are too late to jump on that particular bandwagon. Instead there is another trend – securitization – that is making bankers return to Brazil, having left in 2002 as the crisis in the region reduced banking opportunities to all-time lows. But it isn’t just growth in the securitization market in general that is attracting them. Yes, the real estate market, and so RMBS and CMBS markets, are expected to be big, but that is still a few years away from really taking off.