More than a year and a half since Argentina erupted, the cross-border market is still hostile territory for the country's structured issues, save for the well-tested name of YPF. Local investors have been more receptive, arguably for no other reason than lack of options. Still, the liquidity is there and new ideas are springing up for tapping the Argentine buyside, particularly in the export sector.

Cayman Islands law firm Hunter & Hunter is exploring the potential for an Argentine export-related deal resembling a mutual fund. The SPV would be offshore, while the buyers would be local. "It would be the first type of vehicle in Argentina as a way to finance exports," said Hunter & Hunter Associate Jose Santos Torres at the sidelines of the Latin American Securitization Summit (see ASR 7/14, p. 1). The fund would invest in Argentine exports, Santos said. A potential structure would be different classes of shares, with each share linked to a particular exporter.

Establishing the vehicle offshore cuts sovereign risk. Argentine investors are as eager as their cross-border counterparts to block out the sovereign, but they naturally have a harder time doing so. In fact, some locals may be more beholden to the sovereign than ever, with domestic issuance flowing at a trickle and treasury bills, known as Lebacs, among the few options around.

Meanwhile, the International Finance Corp. is pressing into Argentina's exports (see ASR 7/7, p. 25). The multilateral has committed itself to purchasing US$10 million of a securitization of loans to exporters for up to US$30 million. Called Exportadores II, the deal is the second such transaction from a trio of banks, BBVA Banco Frances, Banco Rio de la Plata and HSBC Bank Argentina. This time around, the loans will probably go to four to five exporters, slightly more than the three that Exportadores I funded. Timing is for two to three weeks.

There is talk of a third Exportadores targeting a much wider pool of exporters, but at least one Buenos Aires-based source familiar with the first two structures said building a massively diverse deal will be considerably more demanding. Many second- and third-tier exporters in Argentina do not have the ratings or credit story to make investors comfortable. The sector may not have the critical mass for a CLO with the level of diversity that would entice buyers.

Regardless of the program's domestic potential, a push abroad is out of the question anytime soon. "It's too early to go cross-border," said Lee Meddin, chief structured finance officer at the IFC.

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