Just like the rest of the world, Brazilian dealmakers are fixated on the looming invasion of Iraq. Action has not ground to a halt however. Local bank Banco Itau is pushing forward a securitization of electronic payment receivables, known as MT-100s, according to sources. The talk is that Nomura is leading the deal and MBIA is providing a wrap to take it to triple-A. Unlike competitors Ambac and XL, MBIA was not tapped out in Brazil, sources said. Officials from the insurer had indicated late last year that once the domestic political turmoil surrounding elections died down, MBIA would return.
Currently sized at US$200 million, the deal is a securitization of payment orders executed through Banco Itau. These include trade payments, foreign investment, tourist inflows and worker remittances. Trade flows typically dominate MT 100 transactions. It is expected out at the end of the first quarter.
In the same sector, talk is growing that Banco do Brasil will make another issuance off an MT-100 program. Considering the dearth of active insurers at the moment in Brazil, chances are the deal will arrive unwrapped, sources said. From the look of things, the issue will likely resemble the last placement off the program, which came in mid-September, right before the market for Brazilian deals clamped shut before elections. Apart from being unwrapped, that issue was a private placement. Moody's Investors Service gave it a Baa1' rating (see ASR 2/3, p.34).
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