Ideal Invest

completed

Ideal Invest (Ideal) recently started providing students with access to loans to finance college tuition.  Ideal funds these loans in the capital markets through securitizations.  The Crédito Universitário Fundo de Investimentos em Direitos Creditórios (FIDC), a vehicle established by Ideal with the sole purpose of buying the student loans originated by financial institutions, issues senior and subordinated securities to fund these purchases.  Local investors buy the senior securities and Ideal buys the subordinated securities issued by the FIDC. Ideal plans to increase its student loans program to approximately R$480 million (approximately $300 million) over the next several years.  As the company plans to accelerate the growth of its student loan portfolio, it has asked IFC to provide a credit enhancement to the senior securities in the form of an irrevocable guarantee to buy mezzanine securities, in an amount up to R$60 million (approximately $37 million) in case certain events occur.  Combined, the subordinated and IFC’s guarantee to buy mezzanine securities should provide senior investors with sufficient subordination.