The time may be approaching when securitization and structured finance transactions are as prevalent in the Latin American market as mortgages are in the U.S. market. An exaggeration? Maybe, but analysts agree that global hardships may bring on an uptick in LatAm securitizations.
"There is a chance structured finance transactions in the region could pick up next year. Corporations are more exposed to the market and the government, and in order to rescue the spread, I think it's fairly likely that some of them will look toward some kind of securitized deal," said Jane Eddy, sovereign analyst at Standard and Poor's.
Where will we see the rise? Analysts suspect the usual candidates will step up to the plate Argentina, Brazil, Mexico. Venezuela, Colombia and Peru or other countries with a need for additional funding may also be more apt to come to market next year.
"If traditional capital markets get dried up or the desire for traditional transactions diminish, structured transactions give more security," said one structured finance analyst. "Some investors might be willing to take [structured deals] on because they offer a better security position in their holdings as opposed to a straight corporate or sovereign issue."
While financial future flows will continue to rise, the volume of future flow deals into the market backed by oil or natural gas are also likely to increase. Other transactions backed by raw resources including copper and steel may be a bit harder to get done if the demand is not there as a result of the lack of construction.