Latin America

Mexico - For the second time this year, following a similar deal in April, Mexican builder Geo S.A. de C.V. is in the market with a second issue for the securitization of future account receivables generated by building contracts for low-income housing, to the tune of P169 million (U.S. $18 million). At the same time, Consorcio Hogar is also expected to close on the same type of securitization in the amount of P300 million (U.S. $32 million), which will be the first of its kind for the smaller Mexican construction company.

Brazil - Banco Santender Central Hispano Americano, S.A. (BSCH), based in Santender, Spain, is furthering its existing presence in Latin America with the recent purchase of Banco del Estado de Sao Paulo (Banespa) for $3.6 billion. Although the acquisition may seem like a sensible move for BSCH, some analysts are wary about the outcome. Moody's Investors Service has changed BSCH's Aa3 debt and deposit ratings outlook from positive to negative.

Mexico - While many Latin American countries are facing tough political and economic heartaches, Mexico seems to be moving in the opposite direction with a hopeful future, although much of the outcome is dependent upon the new Vicente Fox administration. As Fox took his seat in office on Friday, Mexico entered into a time of democratic transition, according to analysts. Although the Fox administration will face great challenges in the months ahead, Standard & Poor's Ratings Services has reaffirmed its BB+ sovereign rating on Mexico with a positive outlook.


India - The National Housing Bank, India's governing body for housing finance, is preparing another foray into the mortgage-backed securitization market, following a successful pilot issue in August. The latest transaction, scheduled to happen at the start of 2001, will also be a test rather than a full-scale deal, but at Rs1.5 billion (U.S.$30 million) will be bigger than the original Rs1 billion issue.

China - Attempts to get the first mortgage-backed securitization launched out of China continue, although it is still not clear whether any real progress is being made. Australian firm Macquarie Securitization has been working for two years on the deal with the government-owned China Construction Bank, but both parties have been frustrated by regulatory and legal impediments.

Japan - A deal from consumer finance company QUOQ was the only issue of note to hit the market. Called Hexagon Funding 2000, the 22 billion (200 billion) transaction was backed by a portfolio of auto loans originated by the company. Deutsche Bank was brought in as lead manager and QUOQ will act as servicer for the loans. The underlying portfolio consists of 17.364 loans with a principal balance of 22.4 billion.

Japan - One of Japan's most frequent visitors to the securitization market, Orico Corp., is preparing yet another deal, this time backed by auto loans. The 34.4 billion ($310 million) transaction, called Oracle Gamma, will securitize a portfolio of around 31,500 loans originated by the company. Orico will service the loans itself and has brought in Mizuho Bank to structure the transaction.

Australia - Evidence of the Australian market's growing comfort with securities backed by assets other than prime mortgages continues to surface, with Standard & Poor's Ratings Services upgrading from single A to AAA the ratings on transactions securitising auto and equipment-lease receivables originated by Orix Australia Ltd.

Saudi Arabia - Moody's Investors Service has issued a structured finance special report on Saudi Arabia. The report, which looks at the legal environment in the light of possible structured finance transactions, has been written by Stephen Roughton-Smith of Moody's. The report might be pointing to the fact that we may soon be seeing a securitization transaction emerging from Saudi Arabia. One of the important points tackled in the report is that there is no legal precedent under Saudi Arabia's Islamic law.


France - After a relative drought of activity in the French ABS market in the last few months, issuers seem to have the taste for it again, joining the huge amount of deals launching in Europe before the year-end. First up comes consumer credit company Cofidis with a deal structured by Credit Lyonnais, followed closely by Natexis Banques Populaires who brought in Merrill Lynch to act as lead manager on its deal.

Greece - In November, Hellenic Securitization SA launched a EURO 745m synthetic issuance of structured notes involving a debtor in the Hellenic Republic. As Stephen King at Deutsche Bank explained: "This is the first securitization transaction to emerge from the Hellenic Republic. In October, the law which governs securitization transactions (originally passed in February) was enhanced to allow for the securitization of future flow receivables."

U.K. - Paragon Auto and Secured Finance (No1) plc (PSAF) recently issued its first euro-denominated transaction, which is secured on two asset classes. A U.K. special purpose vehicle, PSAF launched EURO 285m and GBP26.33m floating-rate notes secured on 18,365 auto loans and secured loans. Lead managers SG sold the deal, which was oversubscribed, in Europe. This included investors in the UK (26%), France (9%), Luxembourg (15%), and Germany (22%).

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