Chile's ABN Amro Securitizadora has slated the country's first securitization in the education sector for pricing May 9. Amounting to 1.0 million inflation-indexed units (UF) (US$24.4 million), the transaction is backed by future college tuition receipts. The originator, Universidad Diego Portales, is transferring into a trust rights to collect tuition from the undergraduate schools of law, design, advertising, and journalism. To offset a drop in forecast flows or other negative events, additional academic departments can be brought into the structure. ABN Amro enlisted the three major ratings agencies to assess the deal, which achieved AA-' on the national scale across the board.
Diego Portales has an investment plan through 2010 that is heavily frontloaded. For this year and 2004, the university aims to outlay 1.29 million UF (US$31.5 million), primarily to build up departments in medicine and education. Some 462,055 UF (US$11.3 million) is earmarked for the entire timeframe of 2005-2010.