Trendbank Multisetorial investors in for a rough rid
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This is the first of two articles discussing Trendbank’s decision to abandon its FIDC (Brazilian ABS) that was collateralized by factoring receivables and other types of business debt. As we discuss in the article, rapidly growing defaults in the ABS forced the company to make the not unheard of decisions to fire 300 of its 360 employees (most of whom worked in the servicing area), move the company’s offices, and call an investor meeting to announce it all. Austin Rating seemed surprised; the Brazilian rating agency lowered the ratings 11 stops from AA-(Brazil) to B(Brazil) after reaffirming the AA- rating in May 2013. Planner Corretora, the administrator, also seemed be caught by surprise. This seems strange given that Trendbank fired so many people and moved the company headquarters, which were a mere ten blocks from Planner’s headquarters. The saddest part of the entire story is that investors should have seen this coming two years ago.