Banco Nacional de Mexico S.A. (Banamex), Mexico's second largest bank, is expected to close a $250 million securitization of future credit card receivables this week. The transaction, which was launched earlier this month, follows two earlier offerings under Banamex's remittance backed program, Credit Card Merchant Voucher Receivables Master Trust. The first deal, totaling $150 million, was launched in 1996, and was followed by a $215 million transaction in 1997.

The underlying assets consist of all future generated U.S. dollar amounts owed by MasterCard International Inc. and Visa International Service Association, including amounts owed in respect of cash advances made through Plus System Inc. or Cirrus System Inc., the cash advance systems operated by Visa and MasterCard respectively.

The dollar amounts derive from credit and debit card merchant voucher receivables generated by the usage in Mexico of Visa and MasterCard credit and debit cards issued by non-Mexican financial institutions and the acquisition of those vouchers by Banamex for processing and payment.

The seven-year notes priced at 168 basis points over Treasurys and have a 7.5% coupon. The transaction features a wrap from triple-A rated MBIA Insurance Corp. and received a preliminary triple-A rating from Standard & Poor's and Moody's. Salomon Smith Barney and Citibank were the managers for the deal.

Though the previous two deals from the Master Trust were also wrapped by MBIA, Banamex's downgrade to BB+ from BBB- by Standard & Poor's last December might have compromised the institution's ability to secure a wrap. According to sources, however, the fact that the deal was based on U.S. dollar-denominated receivables, combined with Banamex's position as one of Mexico's top-notch financial institutions, added stability to the transaction.

At a time when investors seem increasingly reticent to purchase emerging market debt, the Mexican bank was able to launch the deal under auspicious circumstances. "They had available receivables and they took advantage of a favorable period in the market," said Gary Kochubka at Standard & Poor's Latin American structured finance division in New York.

According to sources, the offering was very well received. "The deal was practically identical to the 1996 and 1997 transactions, so investors who participated in those deals were familiar with the structure and felt comfortable with it," said a source.

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