<h1>CRI, CRA, FIDC – What are securitization operations? Learn the meaning of this term and its particularities</h1><h2> </h2><h2>Meaning of securitization</h2>&nbsp;The word securitization relates to negotiable instruments and securities. &nbsp;Securitizing is converting debts a creditor is entitled to receive from its debtors into assets for investors through the sales of securities.&nbsp;In other words, securitization is the process for investors to buy debts from creditors. This way, the advanced payment of such debt is assured to the creditor, and the debtor starts to have an obligation to the investor.&nbsp;But what is the real role played by this process?&nbsp;In this article we will show what securitization is, how some types of it work, and if this process can be beneficial to your company. <h2> </h2><h2>How it actually works</h2>&nbsp;Suppose you have a company, need capital to invest in your projects and has different resource receivables as debts from your customers.&nbsp;Waiting for your debtors to pay you may not be that good and even disturb promising projects.&nbsp;In addition, these debtors may never pay you. In such scenario, securitization emerges as an excellent option, particularly for companies not wanting to make traditional loans.&nbsp;The process is simpler than it seems - the creditors transforms its receivables into securities and negotiate with investors.&nbsp;In this kind of operation, your company receives the advanced value of the receivables it has and ends its relationship with the debtor.  However, you receive a value lower than the total receivables you would have in the future. This difference may be understood as the “commission” of the investor for being exposed to the risks posed in taking the debt your clients had with your company.&nbsp;Broadly speaking, this is how we can define the parties included in the securitization:&nbsp;<ul> <li>Assignor: company that owns the receivables. It can work in any area, such as trade, real estate, industry, etc.</li></ul>&nbsp;<ul> <li>Securitization company: it is the institution responsible for transforming the receivables from a creditor into negotiable securities, playing the role of a mediator.</li></ul>&nbsp;<ul> <li>Investors: people who will buy these securities, taking the risks, and, in exchange, enjoying the possibility of higher returns per investment.</li></ul>&nbsp;<h2>But is the process profitable or not after all?</h2>&nbsp;Some variable factors can make securitization a different process for each company, but, in general, it is highly beneficial for creditors.&nbsp;<ul> <li>For companies, securitization can be profitable, as the risk of the debt not being paid is completely taken by the investor.</li></ul>&nbsp;<ul> <li>There is room for selling these securities to different investors, moreover to the investment fund market, greatly extending the company's capability of rapidly being paid its receivables.</li></ul>&nbsp;<ul> <li>The only disadvantage for the company is the cost of the process. However, the more immediate capital raising from securitization a company has, the more it can invest in its projects and obtain more significant return in the medium and long term.</li></ul>&nbsp;<h2>What is FIDC?</h2>&nbsp;FIDC is the acronym for Fund of Investment in Receivables. It works as a gathering or co-ownership of different investors who, with the same purpose, combine their resources in a common investment for all.&nbsp;Receivables are credits companies are entitled to receive, such as rents, checks, bills or values to be paid in installments by credit card. These debts are converted into securities and sold to third parties.<h2> </h2><h2>FIDC Advantages and Disadvantages</h2>&nbsp;<ul> <li>Credit risk: as it includes receivables, there is room for consumers to delay the payment or even never pay the debt. These factors lead to decreasing the earnings of the fund's investors.</li></ul>&nbsp;<ul> <li>Liquidity risk: as it is a less common investment in the market, there is risk of low demand for the interest that is intended to be sold to the fund's investors. For this reason, it is important to keep monitoring the negotiations of the interest of FIDC funds in the market.</li></ul>&nbsp;<ul> <li>Market risk: when it comes to market risk, we are speaking of the factors directly and indirectly influencing the market, causing changes in the price and profitability of the assets the fund has. An example is the drop or increase in the interest fee that can affect the price of securities with receivables.</li></ul>&nbsp;<h2>How CRI works</h2>&nbsp;The Real Estate Receivables Certificate, known as CRI, refers to a security giving to its owner real estate receivables that, at some point, can be converted into money.&nbsp;The CRI is generally used for raising resources aiming to finance real estate market transactions. In other words, it is backed in real estate receivables, such as housing, commerce or construction financing, long-term rent agreements, financing agreements, rental, leasing, or any other type of transaction with a real estate property as payment guarantee.&nbsp;A simple example of CRI is when a developer decides to market a pre-construction building, granting a longer term for buyers to pay for it. These receivables from the sales of the building can be channeled into a CRI that can be sold to market investors.&nbsp;<h2>What is the relation between securitization and CRI?</h2>&nbsp;In such context, securitization would be the process of transforming the debts of those who, through financing, bought the pre-construction apartments into real estate securities that could then be marketed among investors.&nbsp;In other words, the creditor, i.e., the development company, would receive the money from the debts in advance. And the debtors, i.e., the people who bought the apartments under financing, would directly pay the investors who purchase the securities.&nbsp;The real estate receivables certificates are provided for in Act no. 9,514, of November 20, 1997, which authorizes securitization companies to purchase, issue and trade these securities in the financial market.&nbsp;<h2>How does CRA work?</h2>&nbsp;The CRA or Agribusiness Receivables Certificate is backed by receivables arising from agriculture business (or their cooperatives) and third parties.In general, it includes financings or loans related to manufacturing, marketing, perfecting or industrializing products, machines, implements and inputs used in agribusiness.&nbsp;Securitizating CRA works similarly to the CRI - the debts are transformed into securities, which are then marketed among investors.&nbsp;<h2>Securitizations available in the capital market</h2>&nbsp;We currently have four main types of securitization in Brazil:&nbsp;<ul> <li>Financial Receivables Securitization: in financial credit securitization, the assets undergoing securitization are loans, financings, leasing, and mortgages.</li></ul>&nbsp;<ul> <li>Real Estate Receivables Securitization: the assets undergoing securitization are real estate receivables.</li></ul>&nbsp;<ul> <li>Agribusiness Receivables Securitization: the assets undergoing securitization are agribusiness receivables.</li></ul>&nbsp;<ul> <li>Corporate Assets Securitization: in the case of corporate assets securitization, the assets undergoing securitization are checks, bills, installments, loan agreements, rentals, consumer credits, credit card sales, among others.</li></ul>&nbsp;<h2>Why should a company look for securitization?</h2>&nbsp;The main advantage of choosing securitization in a company is being free to invest in new projects when advancing receivables and being assured there will be no default by its debtors.&nbsp;For this reason, securitization is an alternative increasingly chosen in the market: those looking for financing transform the credits they should receive in the future - when marketing their project - into securities, which, in their turn, are traded to investors, either individuals or companies.&nbsp;These securities, in their turn, are sold in the capital market as fixed income securities, and those buying them count on an investment with a structure full of guarantees and controls, which brings more safety and profitability on the resource invested.&nbsp;Companies choosing securitization have different advantages – liquidity, cash flow, and project feasibility. &nbsp;<h2>My company looks for securitization, what now?</h2>&nbsp;When looking for securitization services from banks, it is essential to observe all information the companies offering the service make available on their websites, including history, shareholders' profile, and operations carried out.&nbsp;It is also important to analyze how a company is mentioned in reliable means of communication to be aware of the quality of their work.&nbsp;Another point is understanding the focus of the bank. If it works nationally and internationally, what services it offers and guarantees it grants.&nbsp;In general, it is important to have a complete map of the opportunities and possible partners, in addition to checking if the company chosen is transparent with its customers.&nbsp;<h2>Banco Master de Investimento</h2>&nbsp;When choosing a securitization service, it is important to look for banks presenting, among its focuses, this working area and, as a consequence, being prepared to make better offers, giving room to reliable and safer partnerships.&nbsp;Banco Master de Investimento is born to outstand in securitization operations, proposing practical structures and legal solutions for small, medium, and big companies.&nbsp;Starting a new business is not easy, and keeping it working, despite all bureaucracy, risks, losses and uncertainties, is a hard task. Having a bank providing this kind of service as a partner brings safety and freedom to start new ventures and extend your business.&nbsp;<h2>Does it work for my business?</h2>&nbsp;If your main goal is boosting your company, having freedom to start new projects, and being sure you will be paid by your debtors, it may be interesting to contact a bank and choose securitization services.&nbsp;One of the main advantages of choosing securitization is the possibility of getting resources without any need to make a loan, but using an amount the company already has. What this operation makes is only advancing these values that would be paid in the future.&nbsp;This way, managers do not need to compromise their cash with one more liability, while they have room for increasing their activity, creating new assets for their business.&nbsp;In addition, it is also possible to have more control on the balance sheet, improving it. All this process must be conducted by financial institutions specialized in securitization, performing operations safely and transparently.&nbsp;The fact the resources are negotiated in the market does not affect customers. The only change is they start to pay the debt to a different creditor, without any loss.&nbsp;Now that you know the advantages of securitization, what do you think of looking for an institution that can assure maximum safety and freedom in this operation?&nbsp;Banco Master de Investimento is here to be your partner in this journey and help your company reach the best results!

CRI, CRA, FIDC – What are securitization operations? Learn the meaning of this term and its particularities

<h1>Investment Bank: what is it and how can it help your company?</h1> If you are here, you must be curious on what an investment bank is and what it does. We will help you!&nbsp;To start with, we should understand the National Financial System. It works based on different agents helping drive the national economy. Banks are intermediates for financial transactions, making it easier for the currency to circulate and giving room to services such as loans investments, financing, etc.&nbsp;In this scenario, there are three types of banks: commercial, multiple, and investment ones. Investment banks started in the United States, after the 1929 crash. Aiming to protect account owners deposits, an act created for separating the banks defined categories of commercial and investment banks. In Brazil, the first investment banks were founded in the 1960s.&nbsp;Now you might be asking "but what is an investment bank?"&nbsp;<h2>What is an investment bank?</h2> Investment banks, like any other bank, are institutions regulated by the Central Bank of Brazil (BCB). In addition, their activities are regulated by the Securities Commission (CVM), which sets standards and limits for investments in Brazil.&nbsp;Resolution no. 2,624, of July 29, 1999, by the BCB defines investment banks as private financial institutions specialized in operations for temporary company interest, productive activity financing for supplying fixed and working capital, and third-party resource administration. They must be organized as incorporations and mandatorily include the expression "Investment Bank" in their corporate name.&nbsp;<h2>And what does an investment bank do?</h2>&nbsp;Investment banks make it possible to grant medium- and long-term credits to individuals and companies through the access to the capital market and carrying out structured transactions. In addition, they can offer other services such as financial assistance and third-party resource administration. Let s learn a little more on their functions and differences from traditional banks. <h2>Investment Bank x Commercial Bank x Multiple Bank</h2> What are the main differences between an investment bank and a traditional bank?&nbsp;On the term "traditional bank", we can consider two definitions: commercial bank and multiple bank.&nbsp;Commercial banks are financial institutions, either public or private, whose purpose is making it possible to raise resources for the short- or medium-term financing of trade companies, industries, service providers, individuals and enterprises in general. They offer services as resource raising through sight deposits (checking accounts), withdrawals, credit card, overdraft facility, in addition to bank charging, fee and public tax activities.&nbsp;Multiple banks, as their name suggests, are banks offering multiple portfolios. One of such portfolios must be a commercial or investment one.&nbsp;Investment banks, on the other hand, aim to promote investments, i.e., to grant medium- and long-term credit to individuals and companies, with highlights to the following services:&nbsp;<ul> <li>financing productive activity for providing fixed and working capital;</li><li>carrying out company interest operations;</li><li>financially assisting individuals and companies;</li><li>administering third-party resources;</li><li>carrying out sales operations, by themselves or third parties, of negotiable instruments and securities;</li><li>coordinating the issuance and distribution of negotiable instruments and securities;</li><li>coordinating initial public offerings (IPO) and subscription of new shares of a company.</li></ul>&nbsp;<h2>What is the best investment bank?</h2>&nbsp;The best investment bank is the one meeting your needs, offering convenience and agility through online services, competitive market fees and financial assistance needed for you and your company to grow together and reach your goals.&nbsp;Banco Master de Investimento, part of Grupo Master, is now born for rapidly and flexibly structuring tailored operations for raising resources in the national and international market.&nbsp;Offering a complete structure, Banco Master de Investimento focuses on servicing customers in an integrated way and as per the highest quality standards. Learn more on the services offered.&nbsp;Your success, our greatest achievement!

Investment Bank: what is it and how can it help your company?

<h1>Is my company ready to go public in the Stock Exchange?</h1>&nbsp;Going public is an important decision to be taken by the shareholders of a company, since it impacts and changes its organizational structure, its corporate governance, and requires financial and managerial information disclosure to all the market.&nbsp;On the other hand, when going public, the company has, for example, access to further financing sources, possibly cheaper, and it can use its own shares to purchase other companies.&nbsp;As it is a usually long and challenging process, it is essential for the company to be well assisted by an institution specialized in such operations.&nbsp;<h2>The decision to go public</h2> The market considers going public takes place when offering shares to the public for negotiation in Stock Exchanges or organized over-the-counter markets. This way, the decision of a company to go public must be based on an analysis of its convenience, considering the benefits and the costs to go public, in addition to evaluating if the organization's profile and culture are fit for becoming a company traded in Stock Exchanges&nbsp;Shareholders choosing to go public are usually looking for:&nbsp;<ul> <li>extension and diversification of financing sources for company growth and modernization;</li><li>management professionalization;</li><li>property diversification;</li><li>consolidation of brand positioning;</li><li>total or partial separation of one or more business units.</li></ul>&nbsp;<h2>Advantages</h2> When selling shares, one must analyze if admitting new investor members will make the current members and the business itself wealthier. If so, other advantages are:&nbsp;<ul> <li>Having access to the capital market and obtaining resources for financing investment projects. Financing through capital market is almost unlimited and as long as the company has feasible and profitable projects, investors will be interested in financing it.</li><li>Creating references for business assessment, as after going public, the company start to be often assessed by investors.</li><li>Encouraging the company professionalization. The process is a consequence of different legal provisions, in addition to the possibility of electing directors representing new shareholders.</li><li>Strengthening the organization's relationship and institutional image. After being listed in the Stock Exchange, the company has its visibility, and, as a consequence, perception and public recognition increased.</li><li>Using the shares traded in stock exchanges as means to pay the purchase of other companies.</li></ul><h2>Disadvantages</h2> Once the shares are traded in stock exchanges, the pressure for better results is immediately felt. Professionals at the company and/or external assistance must consider the disadvantages of going public in order to understand if it is the right choice. The inconveniences of this process may be:&nbsp;<ul> <li>high costs related to the process for going public;</li><li>increase of recurring expenses and compliance costs;</li><li>need for restructuring management and creating investor relations.</li></ul>&nbsp;<h2>How to go public</h2>&nbsp;To start the transformation, the company must make an IPO (Initial Public Offering). It marks the launching of a company in the Stock Exchange, when it introduces itself to possible members, making a share offer in the market.&nbsp;For many companies, this procedure may seem expensive, but issuing these shares is one of the means organizations can count on to raise resources and attract shareholders' interest. In addition, an institution can get more reliable through such process, as the market understands a publicly-traded company presents a higher and more transparent corporate governance degree.&nbsp;Creating an IPO is something that needs planning and time – the process can take up to one year. For this reason, companies are recommended to look for financial consultants and plan the IPO in advance in order to go public at the right time. The expert team at Banco de Investimento Master can help you with this analysis and preparation.&nbsp;Among the costs included in going public are: legal and institutional expenses, marketing for announcing the operation, financial intermediation (coordination and distribution), lawyers and auditors, internal company expenses (process follow-up and internal structuring) and other costs with consultants.&nbsp;Now that you know how companies go public in Stock Exchanges, it is easier to define the next steps for your company, right?&nbsp;<h2>The role of the investment bank in the IPO coordination</h2> Regulation requires public distribution to be coordinated by a financial intermediate. This institution, which usually is an Investment Bank, is responsible for coordinating the process for registering the IPO, the offer schedule, pricing, and the plan for distributing and organizing the operation presentation to the market.&nbsp;The decision and analysis process for making an IPO is not simple, but we from Banco Master de Investimento offer a complete structure for helping you make the right choice. Do you have any questions? Please, contact our team, and we will be pleased to help you.

CRI, CRA, FIDC – What are securitization operations? Learn the meaning of this term and its particularities

CRI, CRA, FIDC – What are securitization operations? Learn the meaning of this term and its particularities

Investment Bank: what is it and how can it help your company?

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Is my company ready to go public in the Stock Exchange?

CRI, CRA, FIDC – What are securitization operations? Learn the meaning of this term and its particularities

Investment Bank: what is it and how can it help your company?