While the holiday lull lingers in Colombia’s domestic market, Commodities & Banca de Inversion (CBI) is upsizing a palm oil securitization, Fidupalma, to Ps50 billion (US$17.4 million) from Ps20 billion (US$7.0 million). “We tinkered with the structure to cut the costs for the originators,” said Viviana Andrea Moreno, project manager at the structuring bank. Drawing on a large pool of growers, the deal may undergo other modifications as well. Fitch Ratings affiliate Duff & Phelps will assess the transaction. Fidupalma has been in the works since at least September, though the slow going is not unusual for the domestic market, particularly in the arena of structured finance.
Beefing up the deal puts it on par with a rival securitization of forward palm oil sales, structured by trade group Promotora de Proyectos Agroindustriales de Palma de Aceite (see ASR 11/11/02, p. 14). Neither deal has timing yet.
CBI is tilling other soil as well. Landowners who are in both the cattle and lumber business have caught the bank’s eye. “Cattle would provide the cash flow in the early years and then the forestry products would come in,” Moreno said, adding that the collateral would be either forward contracts or the actual product. Divvying up their land between tree farms and cattle is a characteristic approach for local producers, she added. “It makes the best use of soil.” CBI has swaggered into cattle territory before. Starting in 2000, the bank has been periodically placing bonds out of a trust that securitized calves raised for slaughter.
Another CBI deal plowing ahead is a securitization of milk and male calves sized at no less than Ps16 billion (US$5.6 million). The deal will be rated by BRC Investor Services, Duff & Phelps sole competitor in Colombia.