FIf 2003 had an overarching theme in Latin America's cross-border market, it was the return of Brazil. Having shed anxieties over the election of leftist president Luiz Inacio Lula da Silva, Brazilian issuers turned around the dismal mood of late 2002 and tapped the market for a total US$3.8 billion (see table, pg.16). The figure rises to US$5.3 billion if transactions carrying political risk insurance (PRI) are taken into account, according to rating agencies. While issuance was strong overall, it was not spread evenly throughout the year. A jump in volume during the third quarter totaled US$2.2 billion.

Renewed confidence in Brazilian product, paired with a lack of monoline supply, resulted in a disproportionate number of unwrapped deals. Some 80% of volume had no surety attached. Future flow deals dominated the scene last year, as existing assets denominated in local currency fell out of favor in the aftermath of the Argentine default and traumatic devaluation. In addition, the banks and exporters that lead the Brazilian market are strong originators of future flow assets. That is not to say that existing assets have been banned from the cross-border forever, as evidenced by the legion of New York bankers talking to mortgage originators in Mexico.

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