Mapa announces Agribusiness Receivables Credit guaranteed by BNDES

The Minister of Agriculture, Livestock and Supply, Tereza Cristina, announced this Thursday (08/04) a new system that allows rural producers to expand access to credit. The model consists of an Agribusiness Receivables Certificate (CRA) guaranteed by the National Bank for Economic and Social Development (BNDES) and is the result of a year of negotiations between Farsul, Mapa and the development bank. As pilot, Cotrijal was chosen, with Grupo Ecoagro as securitizer.

This type of operation is a mechanism that can be used to renegotiate debts outside the banking system or grant new credit. Unlike controlled Rural Credit, the format is not related to official public policy contributions. Furthermore, it can be used for both funding and investment credit. The structure of the operation consists of the issuance of a Rural Product Certificate (CPR) by producers to the originator. The papers are transformed into CRA by a securitization company, and are traded on the financial market. Investors will have a guarantee from BNDES, which reduces the risks of the operation and, consequently, interest for producers.

The choice of Cotrijal as a pilot is due to the fact that it is the largest cooperative in Rio Grande do Sul, and is recognized as being concerned with the well-being of its members. The search for a solution to debts outside the banking system after the severe drought of 2020 was a demand from producers, encouraging the adoption of structured credit operations. The value of the operation is R$29 million with interest of 3,15% and a term of two years. Banco Alfa will be the lead coordinator, guaranteeing the sale of the securities.

The consolidation of the project is seen by Cotrijal as an important step forward in guaranteeing credit for the field, at costs compatible with the producer's needs. The cooperative has 7,9 members and is present in 32 municipalities in Rio Grande do Sul. In 2020, it had revenues of R$2,4 billion. “Making production possible, safely, is strategic for Cotrijal. We are optimistic about the possibility of accessing private credit and honored to be pioneers in this pilot initiative”, says the president of Cotrijal, Nei César Manica.

Contacted by Farsul with the operation proposal, Minister Tereza Cristina brought BNDES into the process. The minister highlighted the participation and involvement of everyone involved throughout the entire construction process. “Today is a day to be celebrated, it is a watershed. This sum of efforts made us have this very important tool for our agriculture. I thank President Montezano (Gustavo Montezano, president of BNDES) for getting his entire team to think outside the box. During the presentation, the president of BNDES, Gustavo Montezano, commented on the operation. “What we are celebrating is more than a routine operation, it is an innovation. It marks the entry into a promising market. We are deconcentrating national credit,” he stated, remembering that the operation is a pilot and will still be improved to allow for its expansion.

Farsul has been working on expanding structured credit operations. The Federation's objective is for more cooperatives, input retailers, cereal producers and trading companies to use the tool. “Farsul feels very honored to be participating in this new step for national agribusiness as a whole. One of Farsul's flags is the free market. We want this type of operation to be more frequent and with more actors. This will mean greater competition, resulting in increasingly better conditions for rural producers so that they can continue investing in the sector without the limitations of official resources”, says the president of Sistema Farsul, Gedeão Pereira.

The securitization will be from the Ecoagro Group. Executive partner Moacir Teixeira sees the CRA as a capital market credit instrument that has been consolidating itself as an important source of financing to meet resource needs in the growing demand for capital for Brazilian agriculture. “The main characteristic is the democratization of credit, transforming individual assets of small and medium-sized producers into more robust structures that access investors with greater transparency and credibility. The operation initiative with the participation of BNDES directly benefits micro and small producers, through their cooperatives and the input chain itself. Without a doubt, it is the first step towards enhancing agricultural financing in a dispersed, organized way, reaching the entire agricultural chain and mainly allowing Brazilian individual investors to participate in this growth”, assesses Teixeira.

Banco Alfa has a history as a financial agent for BNDES since its inception, coordinating pioneering operations for agribusiness, such as the first issuance of CRA Green Bond for the sugar and alcohol sector. “It is a great satisfaction for Alfa to coordinate the first issuance in Brazil of a CRA guaranteed by BNDES, an operation that reinforces the history and pioneering spirit of the institution in disruptive operations, and which helps to further develop a market responsible for a large part of national GDP. The success of this unprecedented operation with BNDES, Ecoagro, Farsul and Cotrijal, will serve as a reference for future Alfa operations together with BNDES to further promote the Brazilian agribusiness sector”, says Augusto Martins, executive director of Corporate & Investment Banking at Banco Alfa.

With the aim of helping to increase the supply of private credit to rural producers, BNDES invests in the new financial product as a major driver for this growth. The institution's experience in agribusiness and the capital market accredits it to develop this type of credit solution. The modeling was designed to stimulate private financing for the agricultural sector in a context of high risk aversion and seeking to reduce the sector's dependence on public resources. “CRA Guaranteed represents another step for the institution towards establishing itself as a bank that promotes development through a wide range of services, including those complementary to traditional financing,” explains the director of Credit and Guarantee at BNDES, Petrônio Tired.

According to data from consultancy Uqbar, CRAs handled R$15,81 billion in 2020. An increase of 28% compared to 2019. In total, there were 65 operations involving 113 titles. With the entry of the BNDES guarantee, these values ​​should increase in the coming years, guaranteeing a new scenario for Brazilian agribusiness.