Starbucks’ commercial real estate certificates (CRIs) are considered safe against an operator’s legal attempt to recoup their value, according to a FII investor in the company’s securities. In a recent report, the fund indicated that the bonds are sound and maintained its earnings forecast. The management of the fund, led by Riza Akin, made their first public comments on the status of the Starbucks CRIs held in their portfolio.
This week, SouthRock Capital, the restaurant operator in Brazil, filed a petition for judicial recovery, citing a debt of R$1.8 billion. However, the court ruled against the company and demanded further details about its financial health. The managers of the fund reiterated that the company’s issued titles are not subject to the ongoing court recovery procedure and are fully paid for the time being. The fund’s portfolio of CRIs are not included in the scope of the competition. The document confirms that “all CRIs remain fully adimplent in their respective shares.”
CRIs are often used by companies as a tool for resource acquisition in the marketplace. Companies bundle their future receipts into this debt instrument and sell them to investors like real estate investment trusts. Typically, the CRIs have a fixed monthly return and are linked to an indicator, usually the CDI (interbank deposit certificate) rate or the IPCA (Broad Consumer Price Index).
The RZAK11 fund holds three CRIs from SouthRock in its portfolio – Starbucks III, IV, and V. These titles have a total value of R$814,000,000.00, accounting for 6.51 percent of the fund’s liquid assets according to the most recent report from the trustee. As of the end of October, the total value of the CRIs was R$50,189,000,000.
Due to the current situation, the shares of RZAK11 have dropped over 7% in the past two trading sessions. From a high of R$92.59, they fell to a low of R$86.34 as of the close of trading on Friday, March 3. However, this incident with Starbucks’ CRIs did not significantly impact the fund’s returns projection for 2023. Fund distributions are expected to continue at the current rate of R$1.30 per cota until December, with a range of between R$1.20 and R$1.40 expected every month.
The paragraph emphasizes that there is a near recognition of a significant “kicker” inside the fund’s catalog, which is responsible for the optimistic distribution forecast for the next months. However, it provides no further details on the subject. The government has promised that the official channels will announce the winner as soon as the “kicker” is confirmed.
Investors in the RZAK11 fund can find reassurance in the statements made by the fund’s management regarding the safety of Starbucks’ CRIs. Despite the recent legal attempt by SouthRock Capital, these titles are not subject to the ongoing court recovery procedure and are fully paid for the time being. The soundness of the bonds and the maintained earnings forecast further support the reliability of these securities.
While the recent drop in RZAK11 shares may cause concern, it is important to note that the incident with Starbucks’ CRIs did not have a significant impact on the fund’s overall returns projection for 2023. The fund’s distributions are still expected to continue at the current rate, providing investors with a steady income. Additionally, the prospect of a potential “kicker” in the fund’s catalog adds excitement and anticipation for the future. Investors will eagerly await the announcement of the winner once the “kicker” is confirmed.