Fundraising and investment tools: Overview

In the dynamic landscape of the capital markets, choosing the right fundraising instrument is a strategic step that defines the cost of capital, the term, and the guarantees of a transaction. Although Debentures, CRIs, CRAs, Financial Bills and Commercial Notes While these are common tools for generating liquidity, each has a distinct issuance logic, backing, purpose, and risk.

The diversity of these instruments allows financing to be tailored to the nature of the business: while some instruments are directly linked to corporate financing, others are structured from real estate receivables, agribusiness, or fundraising by financial institutions.

Therefore, understanding the differences between these instruments is essential both for companies seeking funding and for investors evaluating investment alternatives in the capital market.

In the material below, we have compiled a simplified comparative overview of the main characteristics of each instrument.

Comparative Guide to Debt Securities

1. Debenture

• Issuer: Joint-stock companies.

• Nature/Balance: Corporate debt security; does not depend on specific collateral.

• Typical use: Fundraising to finance activities, projects, or restructuring.

• Point of attention: It may have guarantees and may be convertible into shares, depending on the issuance.

• Key differentiators:
  • Issued by company
  • Corporate debt
  • Without specific ballast.
  • It may have warranties/convertibility.

2. CRI

• Issuer: Securitization company.

• Nature/Balance: Backed by real estate loans.

• Typical use: Financing the fixed asset sector.

• Point of attention: The risk is linked to the structure of the operation and the quality of the real estate receivables.

• Key differentiators:
  • Issued by a securitization company.
  • Connected to the real estate sector
  • Collateral in real estate receivables
  • Securitization structure

3. CRA

• Issuer: Securitization company.

• Nature/Balance: Backed by agribusiness loans.

• Typical use: Financing the agribusiness supply chain.

• Point of attention: The risk depends on the structure and quality of agricultural receivables.

• Key differentiators:
  • Issued by a securitization company.
  • Linked to agribusiness
  • Backing in agricultural receivables
  • Securitization structure

4. Financial Letter

• Issuer: Financial Institution.

• Nature/Balance: Bank fundraising instrument.

• Typical use: Reinforcement of funding medium and long term.

• Point of attention: It is not covered by the FGC (Brazilian Deposit Insurance Fund) and usually has a longer minimum term.

• Key differentiators:
  • Issued by a bank or financial institution.
  • Funding institutional
  • Usually longer timeframe
  • Without FGC

5. Commercial Note

• Issuer: Business Corporation.

• Nature/Balance: Debt security for raising capital in the market.

• Typical use: More flexible fundraising, often with a shorter timeframe.

• Point of attention: A simpler and more agile structure, but it depends on the offer conditions and the issuer.

• Key differentiators:
  • Issued by a business corporation
  • Direct capture
  • More flexible
  • Widely used for funding corporate

Article prepared by: Antonio Mazzucco, Marina Moreno and Paula Suraci.