Certificates of Real Estate Receivables (CRIs) are securities provided in Law 9.514/97, the law that regulates the matter, which may be linked to real estate credits, whose process is called securitization, issued by specific non-financial institutions known as securitization companies, and their main purpose is to foster the Brazilian real estate market through the generation of credit to investors, providing advantages to the investors, such as being exempt from tax at the time of the redemption.
Originally, the funds were raised through public offer after the issuance of CRIs and until their expiration date, being not allowed the issuance of CRIs to secure an amount that was previously spent.
However, in July 2019, the collegiate organ of the Securities and Exchange Commission (CVM), by the vote of Director Flávia Perlingeiro, who was unanimously accompanied by the other members, expressed an understanding on the possibility of structuring CRIs secured by real state credits and that are intended, totally or partially, for reimbursement of expenses incurred prior to the issuance of CRIs (Reimbursement CRIs).
The Reimbursement CRIs were structured so that they are secured by real estate expenses related to the acquisition, construction and/or renovation of specific properties, observing the following rules: (i) the securitization term and the debt instrument must contain specific details of the Reimbursement CRIs and the terms of the real estate financing; (ii) the expenses must have been incurred within 24 (twenty-four) months or less prior to the termination of the CRI Reimbursement public offering; and (iii) the expenses must be subjected to verification by the trustee, to whom must be presented the all the documents related to it.
This new understanding expressed by CVM regarding the use of Reimbursement CRIs has several advantages for the market, the main ones being (i) increased use of CRIs by allowing companies in any industry to use this transaction, provided that the link to real estate expenses is demonstrated; (ii) increased efficiency, given the greater speed with which real estate projects could be structured; and (iii) elimination of the risk of diversion of purpose, since the allocation of resources will be proven from the moment of funding.
Finally, the decision rendered by CVM concluded that, for the sake of legal certainty, CVM Instruction 414, which regulates the issuance of CRIs, will be reviewed in due course so that it can expressly provide for the possibility of Reimbursement CRIs.
