By: Vitor Ferrai and Ivan Kubala

Bonds and CRAs (Agribusiness Receivables Certificates) These are types of fixed income investments that have some important differences between them.

The category of securities called Bonds encompass several types of securities with similar functions: debt securities issued by companies, governments or financial institutions for the purpose of raising funds. They Bonds are traded on national or international markets and, depending on the case, can be issued in different currencies, terms and interest rates. Bond risks can be classified according to the credit rating of their issuer, and the credit risk associated with the investment varies according to several factors., including the market in which the issuer operates and the use or not of guarantees. Bonds are an important source of financing for companies and a risky investment for investors, as there is no instrument similar to a credit guarantee fund that applies to securities.

CRAs are a type of security called a Receivables Certificate issued within the scope of a securitization (acquisition of credit rights to support the issuance of Receivables Certificates or other securities and securities before investors, the payment of which is primarily conditioned on the receipt of resources from the credit rights and other assets, rights and guarantees that support them), operation regulated by Law 14,430. Any security can back an issue of Receivables Certificates, however, the most common operations in this line of business involve agribusiness securities. (which generate the issuance of Agribusiness Receivables Certificates or CRAs) or real estate (which generate Real Estate Receivables Certificates, or CRI). It should be noted that only securitization companies can issue this type of security.

In short, while Bonds are issued by companies, governments or financial institutions and can be traded on international markets, CRAs are issued by securitization companies and are backed by other securities. Both types of investment are considered fixed income, but they present different levels of risk and potential return..

With the collaboration of Luís Felipe Simão