Investors welcomed Chile's first future flows securitization March 9 and a second one is slotted for June, but not all is won for the rookie asset class. While groundbreaking for locals, both transactions fall short of the kind of structure that holds a deal at arm's length from the originator. "Neither is pure future flows," said Octavio Bofill, a partner at Grasty Quintana Majlis & Cia. "There's a recourse to the issuer in both transactions...and they are not off-balance sheet."

While there no apparent regulatory obstacles to prevent the full isolation of pledged assets from an issuer, industry players question the desirability of doing so in the peso market. One impetus for proper future flows deals in the cross-border, where they are commonplace, is mitigating sovereign risk. For Chilean investors, that kind of risk is trivial, since the currency volatility is a non-issue and the sovereign is deeply entrenched in investment-grade territory. In addition, investors are notoriously unadventurous in Chile, in large part due to rules that keep pension funds moving together. "I don't see a lot of space for future flows in Chile...but there will be some more," said Alejandro Sierra, director of Moody's Investors Service affiliate Humphreys.

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