After months of market talk, Colombia's National Coffee Federation (Fedecafe) recently raised $83 million through the issuance of the Series 1999-1 Fedecafe Export Receivables Master Trust Certificates.

The certificates are backed by coffee export receivables and were used as collateral for a five-year loan that was placed in the bank market. Chase Securities Inc. managed the deal.

"The closing of this deal is particularly meaningful because we had to manage several adverse events during the offering and structuring process," explained Julio Torres, vice-president of ABS at Chase Securities in New York. "[Including] the Colombian economic recession, two changes in exchange rate regime, depressed coffee prices and several sovereign downgrades."

Eight banks from Europe, Japan, Latin America and the U.S. participated in the transaction, which was priced at Libor plus 357 basis points, significantly below where sovereign paper is trading.

The deal was rated A-minus by Duff & Phelps Credit Rating Co., making it the highest rated Colombian instrument without multilateral support or monoline wrap. The rating is supported by the fact that Fedecafe exports generate receivables in excess of 30 times debt service coverage and by the existence of covenants that limit Fedecafe's ability to pledge its receivables. - TH


Banco Cuscatlan S.A., a commercial bank in El Salvador, recently closed a $25 million securitization of remittance-backed certificates. The deal follows a similar offering for $50 million, which was launched last year. Both transactions were managed by Daiwa Securities of America Inc. "The bank's 1998 transaction was largely oversubscribed," said an official at Daiwa. "And the same group of investors were eager to participate in the present offering as well."

The notes, which have a five-year final maturity and a three-year average life, were rated BBB by Duff & Phelps Credit Rating Co. and priced between 260 and 300 basis points over Libor.

"There is potential for other banks to become involved in this type of structure," explained Duff & Phelps' Susan Albers. "Salvadoran banks are unlikely to do many credit card securitizations but we feel that the flow of remittances from Salvadorans working in the U.S. will continue, fuelling this type of deal."

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