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.

More than 1.5 million Salvadorans live in the U.S., while the entire country has only 6 million people. Though impressive, the relative size of the ex-patriot population is eclipsed by their actual impact on the economy. According to one source, remittances from all Salvadorans abroad totaled roughly US$5 billion last year, equal to 36% of the country's US$13.7 billion gross domestic product.

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