Deutsche Bank Preps Precatorio Securitization

Deutsche Bank is preparing its most recent deal in a series of relatively novel ABS transacations in Brazil. The FIDC Nao Padronizados Precatorio DB I fund is being offered to investors and is expected to close February 18. The deal consists initially of BRL10m in senior notes and BRL100m in subordinated notes, and the offering could eventually double in size should the issuer choose to raise more funds later on. The notes are backed by credits originating from a court-order that demands the federal government pay two individuals in the state of Rondonia over a tax dispute between the latter and INCRA, Brazil’s agricultural reform and development institute. The amortizing notes have a final maturity of 12 years and will pay a yield of 11% over the IPCA inflation index, which stood at 4.5% at the end of 2007. Qualified buyers and funds based in Brazil and overseas are being shown the notes and are subject to local taxes on their investments. Local agency Austin Rating assigned domestic ratings of A and BBB+ to the senior and junior tranches.