Brazilmania swept the cross-border market in the third quarter. Nine issuers took advantage of a balmier climate, placing a total US$2.2 billion in ABS, double the volume of the previous six months. As the new Brazilian President Luiz Inacio Lula da Silva turned out to be more of a market pussycat than bete noir, foreign investors purred. "[They] realized Lula wasn't the monster they had feared," said Michael Morcom, associate director at Barclays Capital. Other factors goaded on issuers as well, such as still-modest interest rates and a wider pool of investors weary of low-yield product.

With Argentina off the field, beyond Brazil the only country in the region with the potential to crank out cross-border volume was Mexico. But originators in Mexico had turned inward, first from necessity in the hostile international environment, and then to tap into attractive interest rates, swelling local liquidity and locals' fading aversion to structured product.

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