For some time, foreign investors have been purchasing, unhedged, local paper in Mexico, Brazil and other non-developed countries. Now such products as Evolution II CDO are on offer. The deal, arranged by Citigroup Global Markets, gives foreign investors a way to take on FX risk in less developed countries without having to enter a domestic market themselves.

A Citigroup official couldn't be reached for comment about the transaction, which totals $600 million and consists of eight tranches, from A to H. The ratings from Moody's Investors Service range from B2' to AAA'. An unrated tranche of $150 million also figures in the mix.

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