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CRA impacted by Fiagro
By Victória de Sá, Leandro Issaka and Marcela de Carvalho Aguinaga | 24 August 2021 at 10:59 AM
Fiagro presents itself as a consolidating and more flexible instrument for collective financing of the entire agro-industrial chain
Among other important discussions that arose with the enactment of Law 14.130/2021, which created the Investment Fund in Agroindustrial Productive Chains (Fiagro), one of the issues we came up against would be a possible impact of the advent of Fiagro on the issues of Certificates of Agribusiness Receivables (CRA).
The growing relevance of CRAs in the development of agribusiness in Brazil is undeniable. By enabling the approximation between the main national economic sector and the capital market, CRAs boost the financing of the primary segment ("inside the farm gate"), especially for large and medium-sized producers - not excluding small producers, as is the case of the CRA guaranteed by the National Bank for Economic and Social Development (BNDES) -, presenting itself as an alternative to traditional corporate and governmental rural credit lines.
It should be noted that agribusiness production has a specific dynamic that cannot yet be fully covered by CRA regulations.
Consequently, the capital market's potential for financing the agribusiness sector falls short of its demand. As well explained by Matheus Treuk, VERT's legal coordinator, "Law No. 11,076/2004 specifies that the CRA must always have, somehow, the financing reaching the final end, to the rural producer.
In CVM's understanding, even before the issue, it is necessary that all ballast is formalized and properly linked to the CRA at the outset. This is almost always a difficulty, because by the very nature of the field, the ballast is usually generated little by little" ¹.
In this context, the capital market seeks to constantly adapt to the particularities and needs of one of the most expressive sectors of the Brazilian economy.
And, fortunately, Fiagro emerges with this purpose: to be another important alternative for financing agribusiness with private capital, which enables the access of the entire agribusiness production chain to investors' resources.
Fiagro presents itself as a consolidating and more flexible instrument of collective financing of the entire agro-industrial chain. That is, the fund has a larger and more comprehensive list of assets that it can invest in, such as, for example, (i) rural real estate; (ii) participation in companies that explore activities that are part of the agroindustrial productive chain; (iii) financial assets, credit titles or securities issued by individuals and legal entities that are part of the agroindustrial productive chain; (iv) agribusiness credit rights and securitization securities issued with backing in agribusiness credit rights, including CRA; (v) real estate credit rights related to rural real estate and securitization securities issued with backing in these credit rights; and (vi) quotas of investment funds that invest more than 50% (fifty percent) of their assets in the assets referred to above.
It is important to remember that, because CRA is an instrument already regulated and consolidated in the market, there is the possibility that it will be, in practice, one of the main assets for the composition of the portfolio of future Fiagro, which, in turn, may rely on a professional and discretionary management in the selection of these CRA. Thus, we understand that Fiagro and CRA are complementary instruments.
Our co-author on this article, Victoria de Sá, founding partner at VERT, explains that "the possibilities of assets that a CRA can cover are much smaller than Fiagro. The CRA must necessarily be connected to the rural producer, while Fiagro covers the entire agro-industrial chain. On the other hand, the structure of the CRA is much leaner - that is, it requires fewer service providers - than that of the funds. This, logically, translates into lower structuring costs".
According to regulations recently issued by the CVM, it was authorized, on a provisional and experimental basis, the registration of Fiagro with the CVM according to the characteristics of its investment portfolio.
Just as the CRA was based on the regulation of CRI, it was decided to regulate Fiagro using the existing rules for the creation and operation of Real Estate Investment Funds (FII), Investment and Participation Funds (FIP) or Receivables Investment Funds (FIDC).
Finally, we need to remember that Brazil is not made for amateurs, and we still have many challenges ahead of us to make Fiagro a reality, especially when it comes to taxation.
We look forward to seeing Fiagro trail and conquer, together with CRA, the relevance of financing the agricultural market as we have virtuously observed with FII and CRI, in relation to the real estate market.
We would like to thank the active contribution of lawyers Anny Pires and Camila Feltrim dos Santos, from i2a Advogados, in the preparation of this article.
- https://mailchi.mp/d10aa32cbac9/aprovado-pelo-senado-fiago-nova-opo-de-funding-para-o-agronegcio
See the full article: https://www.infomoney.com.br/colunistas/convidados/o-cra-impactado-pelo-fiagro/
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