Starved for funds, Argentine farmers have bundled their resources into a trust that could herald the return of reasonable financing for a critical economic sector. The talk in Buenos Aires had initially tipped Banco de Rio as the first bank this year to land a deal backed by agricultural loans, but now it seems HSBC is in the race, according to sources (see ASR 10/11, p.15). HSBC did not return phone calls seeking comment as of press time.

The collateral is funding for producers, who in turn will sell their goods to a handful of exporters for marketing abroad. HSBC's deal is sized at US$10 million and is actually denominated in U.S. currency, a bold step following the much-maligned pesification of assets and liabilities in the local economy. Fitch Ratings has rated the 8-month transaction A3 on the short-term national scale.

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