Cowboys gone bad, dodgy ranch hands and stolen livestock branded with the insignia of sophisticated financial trusts: a corner of Colombia's securitization market is looking awfully like a Western. While the marriage of agribusiness and structured finance in that country has gone smoothly for other asset classes, recent drama surrounding a cattle-head backed program highlights the risks inherent in corralling footloose ranchers into a trust.

It all began a few months ago, when Cebar Ltda, acting essentially as servicer, noticed gaps in the securitized herds. "It was bad faith by a couple of cattle owners," said Patricia Gomez, an analyst at Fitch Ratings affiliate Duff & Phelps. Two originators were selling cattle owned by the trust and pocketing the proceeds.

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