Credit Suisse (CSGN.VX), Banco Santander Brasil (SANB11.SA) and government-owned Caixa Economica Federal are raising nearly 2.9 billion reais ($1.7 billion) through a structured fund to finance corporate loans in Brazil, Valor Economico newspaper reported on Friday.
The fund, to be called Credito Corporativo Brasil, will lend a maximum of 350 million reais per single company for up to six years, Valor said, citing documentation filed with Brazilian regulators.
The fund will encourage companies to issue domestic bonds, asset-backed securities, promissory notes and export credit notes and then buy them, the newspaper said. It is targeting average annual returns of 1.5 percentage points above the benchmark CDI interbank lending rate [BRCDICETIP=RR], which is currently 10.25 percent, Valor said.
The market for structured finance in Brazil is reviving, a year after the fallout in global credit markets brought demand for the securities to a grinding halt. Concern over the extent and duration of the crisis led private commercial banks to curtail corporate lending and scale down activity in the debt markets.
But there are signs that more hedge funds and private equity vehicles see the structured finance market as a way to profit from rising credit demand from companies in Brazil, Valor said.
Vinci Partners, controlled by senior investment banker Gilberto Sayao, and Maua Sekular are among investment companies considering setting up funds to finance corporate loans, Valor reported.
Caixa, Brazil's largest mortgage lender, will act as a co-manager for the fund, the newspaper reported. ($1= 1.73 reais)