BRAZIL TO REVIVE MBS TAX EXEMPTIONS
By Antonio Guerrero
The Brazilian government is looking to revive the market in mortgage-backed securities by providing tax exemptions for foreign investors, following a nearly 50% decline in sales of new debt supported by mortgage loans this year.
Foreign buyers may invest in either MBSs or in funds that purchase them. But proceeds must be used in investment projects, such as factories and infrastructure, and have minimum maturities of four years to be eligible. The government expects the tax break to raise some $493 billion for infrastructure development projects, while attracting investors to the MBS market.
Ireland’s Experian, which provides credit checks for individuals and companies worldwide, will invest $1.5 billion to acquire a remaining 29.6% stake in Serasa, a leading Brazilian credit data company. The move comes amid Brazil’s consumer credit boom, which has made credit-reporting services appealing for investors. Serasa already holds a 60% market share. The acquisition is expected to be completed by year-end.