Starbucks’ CRIs Remain Secure Amid Legal Battle, Says FII Investor

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Starbucks’ CRIs (Commercial Real Estate Certificates) have been deemed safe against an operator’s legal attempt to recoup their value, according to a FII (Fundo de Investimento Imobili√°rio) investor in the company’s securities. In the overall report, the fund also indicated that the bonds are sound and maintained its earnings forecast.

The fund’s management, headed by Riza Akin (RZAK11), made its first public comments on the status of the Starbucks CRIs held in the fund’s portfolio. This week, the restaurant operator in Brazil, SouthRock Capital, filed a petition for judicial recovery, citing a debt of R$1.8 billion. However, the court ruled against the company and demanded further details about its financial health.

On Friday (March 3), managers of RZAK11 reiterated their claim that Starbucks’ issued titles are not subject to the ongoing court recovery procedure and are fully paid for the time being. The fund’s portfolio of CRIs is not included in the scope of the competition, as confirmed in the document.

The wording of the document is supplemented with the statement, “All CRIs remain fully adimplent in their respective shares.” Companies often use the CRI as a tool for resource acquisition in the marketplace. They bundle their future receipts into this debt instrument and sell them to investors like real estate investment trusts.

In general, the CRI offers a fixed monthly return and is indexed to an indicator, which is usually the CDI rate (Certificate of Interbank Deposits) or the IPCA index (Broad Consumer Price Index). RZAK11 holds three CRIs from SouthRock in its portfolio, Starbucks III, IV, and V. The total value of these titles is R$814,000,000.00, which accounts for 6.51 percent of the fund’s liquid assets according to the most recent report from the trustee. As of the end of October, the paper represented a total of R$50,189,000,000, as shown by the document.

Amidst the current situation, RZAK11 shares have experienced a drop of over 7% in the last two trading sessions, ranging from a high of R$92.59 to a low of R$86.34 as of the close of trading on Friday (March 3). However, the incident with Starbucks’ CRIs did not have a significant impact on the updated projection of the fund’s returns for 2023.

Fund distributions are expected to continue at the current rate of R$1.30 per cota until December, with a range of between R$1.20 and R$1.40 expected every month. The paragraph emphasizes that the near recognition of a significant “kicker” inside the fund’s catalog is responsible for the optimistic distribution forecast for the next few months, but provides no further details on the subject. The government promises that the official channels will announce the winner as soon as the “kicker” is confirmed.

Overall, Starbucks’ CRIs have maintained their value and are not subject to the ongoing court recovery procedure. While there has been a slight drop in RZAK11 shares, the incident has not significantly affected the fund’s returns for 2023. Investors can expect continued distributions at the current rate until December, with the possibility of slight fluctuations.