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Brazil Mortgage-Backed Assets See Huge Demand, RB Capital Says

Alexander Ragir Bloomberg
Brazil Mortgage-Backed Assets See Huge Demand, RB Capital Says - Brazil - Mortgage - Finance

RB Capital Securitizadora SA, which manages 2 billion reais ($930 million) in Brazilian mortgage- backed securities, expects growth of more than 20 percent this year as lower interest rates prompt investors to search for higher returns, said Marcelo Michalua, partner of the firm.

“There is huge demand for financing for real-estate development,” Michalua said in an interview at a hedge fund conference in Sao Paulo. “The government stimulus is helping to stop deterioration and the real-estate market is good during a crisis like this because these assets have intrinsic value.”

Brazilian hedge funds and asset management firms sold equities last year and bought high-yielding mortgage-backed securities as the global financial crisis rattled stock markets. The rally in Brazilian stocks this year hasn’t slowed demand for these securities because falling rates are prompting money managers to search for better returns within their fixed-income portfolios, Michalua said.

He said the company’s mortgage-based assets increased by more than 20 percent last year and expects the same rate of growth in 2009. RB Capital is jointly managed by Rio Bravo Credit Participacoes SA and Lanx Capital Investimentos Ltda.



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