While many emerging market bankers took a holiday break in August, at least a few spent the month fashioning cross-border deals to kick off the fall season. So far, what's in store for future flow investors is a first-time opportunity to try on some Guatemala and an offering from Turkey featuring public debuts for three monoline issuers.
Prior to last week, Wachovia Securities roadshowed a $125 million seven-year bond for Guatemala's Banco Industrial, expected to price shortly as of press-time. Thanks to a wrap from XLCA, the transaction has triple-A ratings from Moody's Investors Service and Standard & Poor's. The underlying ratings are BBB-' and Baa2', respectively. Average life is 4.7 years.
The deal, Guatemala's debut in the future flow sector, is backed by diversified payment rights, the U.S. dollar flows stemming from Industrial's electronic and check remittance business. The check remittance portion is unusually large for a DPR transaction. "They haven't migrated to the electronic form as much as other countries," said Gary Kochubka, a director in S&P's emerging market structured finance group.
Meanwhile, repeat Turkish DPR issuer Garantibank is slated to issue a $500 million, four- tranche deal the week of Sept. 19. Having issued a 2005-A tranche for $300 million in early May, the current deal starts with a B tranche, which amounts to $150 million and matures in October 2012. FGIC is wrapping that series, the first emerging-market future flow transaction in the public market for the insurer. FSA is wrapping a $150 million C tranche, due October 2013. And finally, Assured Guaranty Corp. is wrapping a $165 million D tranche, maturing October 2013. An unwrapped E piece for $35 million is due October 2012.
S&P has rated all the insured tranches AAA' and the E tranche, BBB-'. Moody's meanwhile has rated the B and C tranches Aaa', the D tranche Aa1' - its rating for Assured - and the unwrapped piece, Baa3.
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