With the distaste for most of Latin America holding strong in the dollar- and euro-markets, cross-border securitizations remain few and far between. But pair the one asset class that has recently made it through - electronic wire transfers (MT 100s) - with the region's calmest corner - Central America - and investors may very well bite. It's no surprise then that Banco Salvadoreno is moving forward with a transaction backed by wire remittances from Salvadorans living in the U.S.
But the bank could split the Merrill Lynch-led issue in half from its originally talked size of US$100 million, said a San Salvador-based source. That would bring it closer in line with the last inoffensively sized MT 100 out of Latin America: a US$40 million bond from Banco de Brasil. Rated Baa1' by Moody's Investors Service, the Brazilian deal priced at 7.89% or 475 basis points over treasuries. Unofficial price talk on the Banco Salvadoreno deal is 350 basis points over treasuries. Standard & Poor's and Fitch Ratings are heard rating the bond BBB'/'BBB', though they haven't yet gone public with their assessments.