VW Tightens FIDC

Brazil’s Banco Volkswagen was able to bring in the yield on a BRL930m ($508m) vehicle loan securitization done under the FIDC format. The BRL875m 6-year senior portion pays the DI+1.25%, coming in under a DI+1.75% ceiling. Likewise, a BRL55m portion pays DI+2.05%, under a DI+2.75% limit. A banker on the deal calls the final rates “unexpected,” and owed to much stronger interest than is normally seen in the FIDC market. “This shows there is demand for those transactions that are well structured from a top-class originator,” he says. There was more than BRL2bn in demand from 48 accounts. The deal is also said to be the first with a structure in which amortization proceeds as the deal performs, rather than on a set schedule, a feature common to other parts of the world in which additional risk transfers to investors. The transaction is backed by vehicle loans made by Volkswagen customers. Itau and HSBC are managing the sale, rated AAA on a national scale. The deal should officially close in May.