With the ever-growing popularity of partial risk guarantees in emerging markets, Fitch has quite fittingly completed a study that provides insight into the recovery rates of defaulted loans in Mexico, thus providing somewhat of a guideline as to how much partial risk insurance is needed to benefit a structured transaction.

While the study was completed in Mexico, according to Greg Kabance, an analyst at Fitch, it provides an indication of how loans are performing in other emerging markets. "While creditors rights will vary across countries, this information gives us an estimate of what recovery rates might be in other countries and therefore we know how large a partial risk guarantee needs to be in order to get some benefit," said Kabance.

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