Banco del Credito del Peru's (BCP) $100 million securitization of electronic remittances, which was expected to close in mid-June, is reportedly delayed due to political instability in Peru after the controversial second-round of presidential elections. ING Barings is the arranger for the deal, which is wrapped by a monoline insurer (ASRI 3/13/2000 p.7).
"The political instability shouldn't be a problem in terms of investor reaction because the notes will go into a conduit," said a pro who is rating the deal. "However, there is a chance that pricing might change due to credit quality changes for Peru. It might make the transaction more expensive but it shouldn't deter it from being completed."
Standard & Poor's recently placed Peru's BBB-minus local currency and BB long-term foreign currency sovereign ratings on watch with negative implications. The rating actions follow Alejandro Toledo withdrawal from the second round of presidential polling against Alberto Fujimori, which led international monitors to declare that the vote was not free and fair, leading to the possibility that sanctions may be imposed.
"I think that the elections are going to slow down the deal," said a source involved in the transaction. "You have to let the dust settle."