Brazil's Postalis mulls bad loan options after failed sale -sources

miércoles 14 de septiembre de 2016 15:41 GYT

By Ana Mano and Aluisio Alves

SAO PAULO, Sept 14 (Reuters) - Postalis Instituto de Previdência Complementar, the Brazilian pension fund for post office workers, is gauging how to offload 2.2 billion reais ($661 million) worth of bad loans after a planned sale collapsed amid management changes and feeble demand, according to people with direct knowledge of the matter.

According to the sources, who requested anonymity because the plans are private, the failed sale could be revived once the fund's new management resumes an analysis of the loan portfolio. Options include a partial sale of the loans, or the setup of a credit rights fund through which the loans could be packaged into securities and sold to investors.

On Tuesday, Postalis Chief Executive Officer André Motta told Reuters the pool of bad loans has already been written off and has "zero accounting value." He admitted that selling shares in a credit rights fund, a structure known in Brazil as FIDCs, is an option.

Postalis, Brazil's largest fund by number of participants, extended loans to companies for years, a type of transaction that became increasingly popular among state-controlled pension funds during the leftist Workers Party's 13 years in power.

The fund set up several vehicles through which the loans were channeled into borrowers, some of which issued bank credit notes - known in Brazil as CCBs - that Postalis fully subscribed, the sources said.

Media representatives for Postalis said any option will comply with current rules for pension funds. They declined to elaborate further on the loans and potential actions.

The situation underscores how Postalis, which amassed billions of reais in losses this decade after pursuing risky bets, was burnt by a sudden deterioration in corporate creditworthiness and capital markets activity in Latin America's largest economy.

Postalis, which oversees 8.77 billion reais in savings for 143,000 postal workers, has run a deficit every year since 2011. The fund's investment bets ranged from the bad loans to holdings of Lehman Brothers Inc, as well as Argentine and Venezuelan government bonds.   Continuación...