BER Capital

BER Capital’s business development team covers all regions of Brazil. We are constantly developing new asset-based lending (ABL) and asset-backed securities (ABS) transactions for our portfolios. We also offer our clients discretionary transactions, in which we manage how their investments are made.

Credit securities generally yield significantly higher returns than traditional fixed-income securities (e.g. government bonds and certificates of deposit). Accordingly, we conduct exhaustively risk and credit analysis for each transaction, using the most sophisticated international practices. BER Capital makes use of the most recent credit instruments regulated by Central Bank of Brazil and the CVM.

FIDC: Receivables Investment Funds

Until 2003, credit securities in Brazil were virtually restricted to the issuance of debentures, either from regular companies or Special Purpose Companies.

Resolution 2907 of the National Monetary Council and CVM Directive 356 regulated the establishment of Credit Receivable Funds for the first time in 2001, within an excessively rigid structure that almost precluded their use. In 2003, CVM Directive 393 introduced significant amendments that allowed the FIDC to be used as a marketable product.

In essence, the FIDC structure allows higher returns at mitigated risks by securitizing a portfolio of loans and by using  subordination (junior shares) to protect senior shareholders. Senior sharesholders can expect a reasonable adherence to a pre-established benchmark for returns. There is the added reassurance of rating and quarterly monitoring by recognized credit-rating agencies.

CCB: Bank Credit Certificate

Created on August 2, 2004 by Law 10931, the CCB is a credit security that is issued by individuals or legal entities to financial or financial-equivalent institution. Its represents a promise of a cash payment arising out of any type credit transaction. As a recognized debt it is an enforceable security.

The CCB allows for sophisticated structures, including escrow assignment of credit receivables, and monitoring-segregated structures, such as the use of an escrow agent. Once registered with the CETIP (Brazil's central depository for private fixed-income securities and OTC market derivatives), it may be traded in its documentary form: the CCCB.

Relevant laws and regulations:

• Federal Law 10931/04 (articles 26 to 45)

CPR: Rural Product Note

The CPR is a market-tradable certificate that allows farmers or cooperatives to finance their production with a credit agreement, before their crops are ready for sale. Depending on its type, the CPR may represent a promise of rural products delivery or of cash payment.

Accordingly, financial settlement of a CPR is allowed under specific conditions. Such a financial CPR is a clear legal title, payable at its maturity date. 

Relevant laws and regulations:

• Federal Law 8929/94
• Federal Law 10200/01 (inserted Article 4A to Federal Law 8929/94)
• Federal Law 11076/04

The CDA is a credit security that represents a commitment to deliver a product on deposit. It is issued by the depositary agent on behalf of the depositor, which may be a farm producer, cooperative, industry, exporter or trader. It grants the holder ownership of the goods therein described.

Relevant laws and regulations:

• Federal Law 11076/04 (articles 1 to 22)

This is a credit security granting the creditor a lien on the products described in the related CDA. The depositary agent issues the WA and the CDA togheter, and both securities are identifier. They originate jointly but may be traded separately.

Relevant laws and regulations:

• Federal Law 11076/04 (articles 1 to 22)

The CDCA is a credit security issued exclusively by cooperatives or legal entities engaged in storage, sale or processing of farming supplies or machinery. It represents a promise to effect cash payment and constitutes an extrajudicial executive title. It is backed by credit rights (e.g. receivables) arising from the sale of agribusiness products.

Relevant laws and regulations:

• Federal Law 11076/04 (articles 23 to 25 and 28 to 35)

The CRA is a credit instrument that represents a promise of cash payment and constitutes an extrajudicial executive title. The issue of the CRA is exclusive to companies providing securitization of agribusiness credit rights (e.g. receivables).

The CRA was created solely to raise funds for the agribusiness sector. Brazilian individual investors enjoy the benefit of its tax-free status.

Relevant laws and regulations:

• Federal Law 11076/04 (articles 36 and 37)
  

NCA: Agribusiness Trade Note

The NCA is a trade promissory note for public distribution issued by corporations, limited partnerships and cooperatives engaged in the production, sale or processing of products or supplies for the farming industry, or of machinery or devices used in farming operations.

Relevant laws and regulations:

• Federal Law 11076/04 (articles 23, 26 and 27 and 28 to 35)

CCI: Real Estate Credit Certificate

The CCI is credit certificate that represents ownership of a real estate loan. Like a CCB, a CCI may be freely traded in its documentary or registered form, and it may be secured or unsecured.

Relevant laws and regulations:

• Federal Law 10931/04 (articles 18 to 25)

CRI: Real Estate Receivables Certificate

The CRI was created solely to raise funds for investment in the real estate industry. Individual investors enjoy the benefit of its tax-free status.

Relevant laws and regulations:

• Federal Law 9514/97 (articles 6 and 7)

This material is strictly for information purposes and should not be construed as an offer buy or sell shares in the funds managed by BER Capital or any of its affiliates or sub-advisors. It is essential to read the funds By-laws and prospectuses before making any investment decision, as well as being aware of the risks inherent to such investments and being prepared to accept them. Shares of funds are subject to negative variation. Past performance is no guarantee of future performance. "Product not guaranteed by the Administrator and Managing Institutions, or by the Credit Guarantee Fund (FGC)"