Following a four-month delay, BBV Securities Inc. is ready to launch a $94.4 million securitization of receivables for Representaciones de Telecomunicaciones S.A. (RTSA), a leading telecommunications company in Argentina.

A small portion of the offering will be marketed to local investors in Argentina and the reminder to U.S. investors under Rule 144A. In contrast with the structure that was expected in May, the deal now features a credit default swap, in response to investor requests.

"Securitization structures are just not getting a high enough ratings," explained Diane Audino, analyst with Standard & Poor's in New York. "You can still bring deals to a certain level, but some investors would like credit ratings even higher because of the emerging market crisis and the Y2K factor and ask for more enhancements to the structure."

The transaction is collateralized by dollar-denominated receivables of Argentine corporate promissory notes and deferred payment checks. The receivables were originated by RTSA with Miniphone S.A. and Telefonica Comunicaciones Personales S.A., respectively subsidiaries of prominent telecommunications companies, Telefonica de Argentina S.A and Telecom Argentina Stet-France Telecom S.A., and both viewed as investment grade credits.

BBV in New York will provide a liquidity facility that will make payments to international investors during the first year of the three-year deal, since the underlying Argentine securities will not make payments during that time. In addition, the bank will provide a three-month offshore convertibility facility, which will protect investors from exchange controls imposed by the Argentine government.

In May, the domestic portion of the deal received preliminary triple-A local scale ratings (mainly as a result of the strength of the underlying collateral), while Standard & Poor's and Fitch IBCA gave the transaction a triple-B-minus international credit rating. Now, due to the credit default swap, the international credit ratings are expected to go up to double-A.

Interest on the investor certificates, issued through RT Telecommunications Receivables Trust, will be at the rate of 8% and the transaction is expected to close next month. This is RTSA's second securitization.

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