The Chilean market has started 2004 with a new asset. Last week, Banchile Securitizadora closed a Ps6.35 billion (US$11 million) deal backed by accounts receivables. The originator was Ariztia Comercial, a food company that specializes in turkey and chicken. Rabobank bought the entire transaction, according to a source. The yield was 250 basis points over 90-day TAB, a rate common in the banking market but rare in market funding. Moody's Investors Service affiliate Humphreys and Standard & Poor's affiliate Feller Rate gave the deal an A' on the national scale. IBS Abogados was legal counsel.

The receivables have an average revolving period of 45 days. The final legal maturity of the deal is five years. Dilution and default reserve funds are equal to 5.74% and 5.64% of the transaction, respectively. The dilution fund affords breathing room for receivables that are not paid in full because of minor errors such as the volume of a shipment coming short of the amount billed.

There are about 200 obligors in the transaction. Supermarket giants D&F and Cecosud - which owns the Jumbo and Santa Isabel chains - make up between 15% and 20% of the total. No other client accounts for more than 3% of the receivables.

Players are hoping this transaction has cracked open the window for other issuers to tap this previously virgin class. "A lot of the medium-sized companies that currently use factoring will probably look at this option," said a Santiago-based source.

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