A trio of asset-backed deals for Latin American airlines - one closed and two on the way - once again demonstrate the power of securitization, even for airlines with a checkered past. Of the three airlines in question, two have previously issued asset-backed deals and while they have defaulted on other kinds of debt they have never looked likely to default on their securitizations - something that has obviously given investors enough comfort to come back for more.

"There are a two main reasons why these airlines have been able to perform so well on their securitizations through stressful times," explained Samuel Fox, assistant vice president at Duff & Phelps. "One reason is related to the fact that creditors can't successfully attack the structures and get at the assets in this type deals, the other reason is related to the way airlines operate.

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