AgriConnection raised $20 million through a dollar-denominated receivables fund, carving out a rare source of hard-currency funding for Brazil’s agribusiness sector at a time of tight domestic credit.
The transaction adapts Brazil’s local receivables-securitization framework — known as FIDC — into a structure indexed to the US dollar, a first of its kind in the country, according to Fábio Fanti, partner at Exa Capital.
While FIDCs typically bundle local-currency receivables and issue securities to investors across different risk tiers, this vehicle is backed by dollar-linked cash flows generated by AgriConnection’s export-oriented sales. The fund was structured by Exa Capital.
The fund has net assets of $20 million, equivalent to about 120 million reais, reflecting regulatory requirements that offerings be registered in local currency. Rabobank subscribed to the senior, lower-risk tranche, while AgriConnection and Exa Capital retained the subordinated tranche.
Underlying assets consist of receivables tied to AgriConnection’s dollar-denominated transactions with farmers, cooperatives and distributors. Borrowers issue rural credit notes — known locally as CPRs — to the fund and repay them at maturity based on the official PTAX exchange rate on the settlement date. The structure does not include currency hedging and targets an annual return of about 7%.
CPRs are a widely used financing instrument in Brazil that allows agricultural producers to raise working capital by committing either future commodity delivery or cash settlement.
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AgriConnection’s receivables portfolio includes large cotton and soybean producers, cooperatives and established distributors, according to Exa Capital.
The initiative is being rolled out as a pilot. Roughly 40% of AgriConnection’s sales are dollar-linked, with the fund currently covering only 6% of that volume.
“These receivables usually sit on our balance sheet because Brazil doesn’t have a standardized structure to rotate dollar exposure,” said Flávio Mata, AgriConnection’s co-founder and chief executive officer. “We chose to innovate in a way that can open the door for other companies facing the same constraint.”
The fund has a three-year tenor and began operations in January. Exa Capital plans to run one to two full crop cycles before scaling the model, allowing time to test controls, processes and portfolio performance.
Based on AgriConnection’s existing client base, the fund’s size could triple, said Fábio Fanti, Exa Capital’s co-founder and head of agribusiness. The firm is also in talks with other agribusiness companies to replicate the structure, including suppliers of machinery, irrigation systems, seeds, fertilizers and farm services.
The deal took about 15 months from mandate to closing, requiring the development of fund rules, valuation models, operational agreements and collateral frameworks from the ground up.
