More details have surfaced on one of Colombia’s first palm oil-backed deals. Promotora de Proyectos Agroindustriales de Palma de Aceite (Propalma) has assigned a ten-year tenor to its Ps50 billion (US$17.5 million) securitization, according to sources familiar with the transaction.
Yet to be rated, Propalma’s transaction is about as far along as a rival palm-oil backed bond structured by Commodities & Banca de Inversion (CBI) (see ASR 9/30, p. 28). Both deals aim to be the country’s inaugural issue backed by palm assets.
While CBI enlisted Duff & Phelps to rate its deal, Propalma went to BRC Investor Services, formerly BankWatch Rating of Colombia. Both agencies are expected to conclude their assessments shortly, though they might not go public with the ratings.
To date, Duff & Phelps has put out the lion’s share of domestic ratings on structured finance transactions, with BRC focusing on financial institutions and money market funds. No other agencies operate in Colombia.
Fiducoldex and Fiduvalle are the trustees of ProPalma’s deal. Propalma was constituted through an association of government agencies, a palm-grower trade association and a group of 43 palm growers. “The objective of this and future securitizations is to promote palm oil plantations,” said a source close to the deal.
With an output of over 500,000 tons, Colombia is largest producer of palm oil in Latin America and the fifth biggest in the world. In addition to palm oil, other commodities such as flowers and bananas have caught the eye of securitizers as well (see ASR 9/30 p.28).