The cross-border Latin American market witnessed the close of one deal last week, a $100 million, seven-year securitization of diversified payment rights by El Salvador's Banco Cuscatlan. Sole lead Citigroup Global Markets was understood to have dropped the deal into a conduit and pricing details were unavailable at press time.

Wrapped by Ambac, the deal earned triple-A ratings from Fitch Ratings and Standard & Poor's. The transaction breaks new ground by pulling additional countries into a structure that introduced the multi-jurisdictional DPR deal in September 2003. For the first time Cuscatlan units in Panama and Honduras are contributing their DPRs to a transaction, joining their counterparts in Costa Rica and Guatemala, and, of course, the host country of El Salvador, which still accounts for 70% of total flows.

Three correspondent banks that channel more than 90% of Cuscatlan's DPRs have signed on the transaction, agreeing to shift payments into the issuing trust.

The transaction brings the total amount issued under Cuscatlan's DPR program to $370 million. About $305 million is currently outstanding, according to an S&P report.

Both Fitch and S&P rate the underlying credit strength of the transaction triple-B and, the corporate, double-B. Cuscatlan is El Salvador's second largest bank, with shares of the deposit and loan markets of 22% and 21%, respectively, at the end of 2004. The bank is controlled by Corporacion UBCI, which is the second largest Central American-based conglomerate, according to Fitch Ratings.

Timed to issue this week is a $500 million DPR transaction from Turkey's Garantibank. The deal is broken up into four tranches, three of which are insured, each by a different monoline guarantor (see ASR 9/12/05). Led by Standard Chartered, the deal is backed by money flows from 10 correspondent banks, which represented 78% of payment orders in dollar terms during the first half of 2005.

Garanti's DPR volume is well diversified, according to a report by Moody's Investors Service. Export clients contributing to the flows number about 26,000 and DPRs flow in from more than 94 countries.

(c) 2005 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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