Latin American securitization pros' catchphrase used to be "get over Y2K and everything will be fine." But January 1, 2000 came and went without any major computer meltdowns and the Latin market has stubbornly refused to pick up steam.

"Emerging market asset-backed deals offer a lot of protection but right now they are not offering enough yield pick-up," said Michael Lucente, head of Latin America structured finance at Merrill Lynch. "Issuers are not saving enough by doing a securitization in order to justify pledging their assets and many investors see no reason to buy a low investment grade emerging market bond, even if it is structured, when they can buy a similarly priced U.S. domestic bond. The value argument is just not there right now."

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