Domestic issuance in Latin America's bulkiest markets - Brazil and Mexico - is forecast to keep growing in 2006, despite upcoming presidential elections in both countries. Sources concede that there will be a window of diminished or no issuance surrounding the actual votes, but see little chance of a longer lasting derailment. Brazil and Mexico have presidential elections slotted for October and July, respectively.

Having blossomed into the golden child of emerging markets structured finance over the last few years, Mexico's local currency sector will edge closer to maturity in 2006. "Domestic MBS and ABS should keep growing in terms of complexity and volume," said Juan de Mollein, director in the emerging markets structured finance group of Standard & Poor's. Deals backed by entirely new assets, however, will be at best sporadic, sources said.

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