Following a similar path to the United States in the development of a securitization market, Chile has pumped out a record-breaking amount of mortgage-backed securities deals this year, and is moving forward to a plush credit card market in 2002.
After the implementation of the securitization law in 1999, the domestic MBS market has picked up in Chile. Beginning in 1996, there was one MBS deal a year until 1999. In 2000, there were two deals, in 2001 there were six deals and so far this year, there have been eight, and two more are expected to close before year-end.
Transa Securitizadora SA, the first company to bring an MBS deal to the Chilean market in 1996, is one of the two companies expected to hit the market by year-end. The deal is a fifth series and totals $1.088 million.
Issuance this year has reached about UF 10 million (U.S. $385 million). "It's not a huge market, but it's interesting in terms of the evolution of assets, the evolution of investors," said one rating agency analyst. "They have a very established investor base because the pension fund system in Chile has been in place since the 80s."
The main players this year have been: ABN AMRO Securitizadora, Banedwards Securitizadora, Securitizadora BCI SA, Securitizadora Bice SA, Transa Securitizadora SA, Santander Securitizadora SA, Securitizadora La Construccin and Securitizadora Security SA.
The market is now moving in the direction of credit card securitizations. "All of the mortgage deals are similar to the U.S. [deals] in that they are 20- to 30-year deals," said the analyst.
"They have very long maturities because of the quality of the assets and the characteristics of the assets." According to the analyst, the credit card deals that are expected to be in the market in March are aiming to have tenors of between four and 10 years, which is quite long for the Latin American market.