Under the stormy cloud of a relentless political corruption scandal, Chile's Santander Sociedad Securitizadora issued a bond packed with government risk in mid-January (see table). The domestic deal is backed by future payments to a public works company from the Ministry of Public Works (MOP), which has drawn a battery of bribery accusations since October.

Yet investors, undeterred, bought in. "Sure it's state risk, but the payment contracts are super solid and the regulatory framework is intact," said an official at a pension fund that snatched a piece. "Despite all the noise, I don't see any way they wouldn't make good on these payments." The novelty of the asset type proved another draw, he added.

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