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Starbucks’s Commercial Real Estate Certificates (CRIs) are deemed safe from any legal attempts by an operator to recover their value, according to a prominent FII investor in the company’s securities. The investor also stated in their comprehensive report that the bonds are secure and maintained their earnings forecast for Starbucks.
This announcement was made by Riza Akin, the head of the fund’s management (RZAK11), which revealed the first public comments on the status of Starbucks’s CRIs held in the fund’s portfolio. Recently, SouthRock Capital, the operator of Starbucks in Brazil, filed for judicial recovery, claiming a debt of R$1.8 billion. However, the court ruled against the company and demanded more information regarding its financial health.
On Friday, the managers of RZAK11 reiterated their assertion that the issued titles of Starbucks are not subject to the ongoing court recovery procedure, and as of now, are fully paid. The fund’s portfolio of CRIs is not included in the scope of the competition and remains unaffected by the judicial recovery procedure. The document further confirms that “All CRIs remain fully adimplent in their respective shares.”
CRIs are commonly used by companies as a means to acquire resources in the market. In this debt instrument, companies bundle their future receipts and sell them to investors, such as real estate investment trusts, in exchange for capital. Typically, CRIs come with a fixed monthly return and are adjusted according to an indicator, typically the CDI (Interbank Deposit Certificate) rate or the IPCA (Broad Consumer Price Index).
RZAK11 has three CRIs from SouthRock in its portfolio, namely Starbucks III, IV, and V. The total value of these titles is R$ 814,000,000.00, which represents around 6.51% of the fund’s liquid assets, as per the most recent report from the trustee. As of the end of October, the paper represented a total value of R$50,189,000,000, as stated in the document.
With regards to the recent developments, RZAK11 shares have experienced a drop of over 7% in the last two trading days, falling from a high of R$92.59 to a low of R$86.34 as of the market close on Friday.
However, despite the incident involving Starbucks’s CRIs, it has not had a significant impact on the fund’s projected returns for 2023. It is anticipated that fund distributions will continue at the current rate of R$1.30 per cota until December, with an expected range of between R$1.20 and R$1.40 monthly.
The paragraph emphasizes that the optimistic distribution forecast for the following months is due to the imminent recognition of a significant kicker within their catalog. Further details regarding this matter are not provided, but the government assures that the official channels will announce the winner as soon as the kicker is confirmed.
