Brazil's domestic securitization market has fallen victim to a combination of the summer doldrums and potential management changes at state pension funds engineered by the new presidential administration. Dealmakers are either moving forward at a snail's pace or waiting until the end of February. "We don't expect to see very much before March," said a source at one Brazilian securitizer.

On the MBS front, activity should pick up slightly from last year, observers say. Local securitizer Brazilian Securities is readying a small deal, with a senior tranche worth R$7.59 million (US$2.1 million) and rated' on the national scale by Moody's Investors Service. The agency has R$49 million (US$14 million) in MBS issuance under its belt and aims to bring its latest deal to the market in about a month, said a source on the deal. Official price talk is 12% plus the IGPM inflation index, the same rate as the previous handful of deals executed by Brazilian Securities. The subordinated piece enjoys a 30% credit enhancement, consisting of 22.5% subordination from an unrated subordinated tranche and 7.5% in residual certificates.

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