Jamaica is poised to issue a deal backed by diversified payment rights that is not only a debut in the asset class for the country but the Caribbean as well.

Sole lead Credit Suisse will launch the road show for the seven-year final, $100 million transaction on March 6, according to a source familiar with the company. Pricing is due by mid-March. The originator is National Commercial Bank Jamaica, an issuer that has already tapped its credit card vouchers for ABS deals executed by Citigroup.

Fitch Ratings and Moody's Investors Service rate the deal BBB-' and Baa3,' respectively. Fitch's grade is four notches above the bank's corporate rating of B+.'

As DPR deals have been overwhelmingly coming from Turkey and Brazil, with a smattering from Central America, investors will welcome the chance to diversify their portfolios, said a source close to the deal. The payment orders are not overtly dominated by a particular economic activity or area of investment.

"The flows here are well diversified," another source close to the deal said.

While DPRs in Central America are strongly linked to family remittances, and in Brazil exports play a large role, NCB's payment orders are more evenly distributed among trade, capital flows, tourism, the bank's foreign exchange operations and remittances. But the figures mask the fact that tourism is indirectly a generator of as much as 40% of the bank's DPR flows, if payment on general services and investments such as hotels, transportation and construction are included, as outlined in a Fitch report. Family remittances make up roughly 10% of total DPR flows.

The DPRs collateralized in the deal are dollar denominated. The bank processed $1.1 billion in dollar DPRs in 2005, up from $818 million in 2004. More than 90% of NCB's payment orders flow through five correspondent banks, which will sign notice and acknowledgment agreements obligating them to make payments to the offshore accounts controlled by the deal's trustee.

The fact that sovereign bonds and loans to public entities make up most of NCB's assets is a heavy constraint on the bank's creditworthiness, according to Standard & Poor's, which rates it B' on an unsecured basis. That concentration in NCB's loan portfolio is higher than that observed in other Central American and Caribbean banks because "the loan portfolio is relatively small, there is a reduced number of clients and loans are larger than those of other institutions," S&P said in a report.

NCB is one of Jamaica's leading banks, with a 35% market share in deposits. The bank has benefited over the last year from "a stable foreign exchange market, lower rates than in prior years, and improved economic conditions," S&P said.

(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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