SP Road Authority Plans ABS

Sao Paulo’s Departamento de Estradas e Rodagem is planning to raise BRL708m through an FIDC local market securitization, according to regulatory documents. The deal is backed by future payments coming from privatizations of 5 road concessions in the state of Sao Paulo. In recent concessions, the government typically has received full payment at the time of an award. However, a banker on the deal explains, these 5 concessions – done during 1997-1998 – are paid for in installments over the life of their contracts, providing a steady flow of revenue to be securitized. The 8-year transaction is divided into 2 pieces with the first paying the DI rate plus 3.2%, and a second ICPA rate plus a spread to be determined during bookbuilding. The amount of each series remains to be set, with the issuer able to size closer to the time of the sale according to demand, says a banker on it. Santander is managing the sale, not yet rated, which should begin a roadshow June 15, according to the filings, with bookbuilding estimated for July 14-23. The 5 concessions in the FIDC include the Autoban and ViaOeste concessions managed by CCR, and the Intervias, Centrovias and Autovias concessions managed by OHL.