Brazil's Unio de Bancos Brasileiros SA, (Unibanco) and The Republic of Panama's Primer Banco del Istmo SA are continuing to tap the conduit market with the launch of letter-of-credit backed programs - arguably not true securitizations, though many market participants agree that they are currently the preferred mechanism for issuance.

Unibanco has launched a $175 million commercial paper program backed by a letter of credit from HSBC Bank. Moody's Investors Service has assigned a Prime-1 rating to the program, reflecting HSBC USA's Prime-1 rating.

According to sources, the program was a renewal of a program originated by J.P. Morgan Chase in the late 1990s, though sources would not say why the program was not renewed with the original bank.

Unibanco currently has two other LOC programs in place via West LB and Barclays Bank Plc. The program with West LB will expire in July; however, it has continually been extended since 1994. Additionally, the program involving Barclays Bank will also expire by year-end, and it is unclear if the existing programs will be replaced, renewed or terminated. Sources say the outcome will likely depend on market conditions.

Primer Banco has also launched a $175 million commercial paper program backed by a letter of credit from Barclays. Fitch has assigned an F1+ rating to the program, based upon Barclays rating. The depository, Bank One, NA, will act as the issuing and paying agent and will draw on the letter-of-credit for all payments of principal and interest on the commercial paper notes, as they mature. Bank of America Securities LLC and Bank One Capital Markets, Inc. are the dealers of the notes.

The proceeds of the program will be used for short-term trade purposes by Primer Banco.

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