2023-06-07 18:00:36
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Bonds issued by securitization companies is a possibility for a company that has receivables, but cannot wait for all debts to be paid to continue its activities. It may be a more affordable alternative than going to a bank and taking out a loan, for example.
After all, it is possible to obtain resources more cheaply. Therefore, it is worth understanding better on the subject. Now, you will understand what a securitizer is and what its characteristics are. Also, you will find out which titles are issued!
First of all, what is a securitizer?
Before understanding what a securitization is, it is important to know what securitization is. To securitize is to transform credit rights, which may come from sales or provision of services, into securities that can be traded in the financial market.
Debts are transformed into securities and are traded between investors. Therefore, the securitization company is the company that is willing to carry out these transactions. As a result, they issue fixed income securities backed by these operations.
What securities are issued by securitization companies?
Securitization companies need express authorization from the Brazilian Securities Commission (CVM) to issue securities.
Learn more regarding some of them below:
The real estate receivables certificate is a private credit instrument intended to finance real estate expansion. The securitization company “packages” the receivables and allows them to be converted into securities and traded with investors.
The CRI is exempt from income tax for individuals. With this, it is possible to improve returns and make asset management more practical. The return on these bonds can be fixed, post-fixed or hybrid.
The agribusiness receivables certificate is a title similar to the CRI, with very similar functionality. The difference is the issuing company — which is active in the agribusiness sector.
It is worth mentioning that CRI and CRA liquidity is usually low – except in the secondary market. And in general, the redemption period is medium to long. These characteristics must be considered when investing, so that securities are aligned with your objectives.
Debentures are debt securities issued by companies. As with other fixed-income securities, the yield can be prefixed, post-fixed or hybrid. The characteristics vary according to the company and the type of title.
The liquidity of debentures is usually lower. Early redemption can occur by selling on the secondary market, but the volume of negotiations can make the process difficult. Therefore, it is interesting to plan to redeem at maturity.
The debentures are subject to Income Tax which follows the rate of the regressive taxation table. Means that periods above 2 years lead to a minimum rate of 15%. On the other hand, there are incentive debentures.
In this case, they are linked to infrastructure projects and receive tax incentives from the Federal Government. As a result, they are tax exempt. With regard to security, some debentures have guarantees, which make them less risky.
The receivables investment fund (FIDC) is a collective investment modality. Most of the quota holders’ resources are invested in credit instruments formed by accounts receivable from companies.
The FIDC can be open or closed. In the first case, the shares can be redeemed at any time, as long as the fund’s rules are respected. The closed-end FIDC only allows redemption at the end of the term defined in the fund’s regulations.
With regard to taxation, the FIDC follows the regressive income tax table. Thus, the lowest possible rate is 15%, when holding the investment for 720 days or more.
Main features
In order for the titles to be created, it is necessary for the creditor’s credit rights to be assigned to the securitization company. From this, the certificates are issued and made available in the financial market.
When investors buy securities, the securitization company raises funds and pays for granting credit rights to the creditor.
Thus, the debtor becomes indebted to the securitization company and it is responsible for remunerating the investors who acquired the securities, in accordance with what was previously defined in the Securitization Term.
For the investor, the securities acquired work like other fixed-income securities. All they have to do is apply to their financial institution and keep the money invested. Afterwards, you receive the amount plus interest on maturity — the remuneration format is previously established.
Thus, the main characteristic of securitization companies is the possibility of anticipating different types of receivables. Among them are rental contracts, checks, invoices, mortgages and other future receipts.
They issue debt securities with the same characteristics as the backed credit rights and may conduct business and issue other credit securities. Securitization companies can also collect receivables from the assignor.
Advantages and disadvantages of bonds issued by securitization companies
In general, investment in bonds issued by a securitization company becomes more attractive because the yield offered is generally higher than safer bonds. Thus, they can be an alternative when the economy’s basic interest rate is low, for example.
But the reason for the higher yield is one of the disadvantages of bonds: the higher risk of default by private companies. In addition, the investments mentioned in this article are not covered by the Credit Guarantee Fund (FGC).
Consequently, returns need to be higher to attract investors. To mitigate some risks, it is possible to analyze the issuing company. You can refer to rating scores assigned by rating agencies to analyze the danger of default.
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