Surety provider MBIA seems to have quite an appetite for Mexico. After introducing the monoline guaranty into the peso market just over a year and half ago, the guarantor is now on its third domestic transaction. And that doesn't count its surety on what appears to be the only cross-border securitization to come out of Mexico in the last year: a $300 million, seven-year credit card-backed deal originated by BBVA Bancomer (see ASR 2/9/04).

Meanwhile, Ambac and XLCA have yet to guaranty a domestic Mexican transaction, though their participation seems to be only a matter of time. "We like Mexico and are currently looking at several infrastructure transactions there," said Wynne Morriss, senior managing director at XL. Ambac has indicated that it is also on the prowl south of the Rio Grande, though it is reportedly leaning towards real estate-related deals.

MBIA declined to comment on the upcoming transaction, which is sized at Ps2.1 billion ($184 million), according to a source. That would bring the total that MBIA has wrapped domestically to roughly Ps8.8 billion.

While industry veteran BBVA Bancomer led the first two MBIA-wrapped deals, the one coming down the pike was structured by Banorte and Project Finance Associates, a pair of arrangers not traditionally associated with the industry in Mexico.

Active as a placement agent in other realms of structured finance, Banorte has not led any of the second-generation toll-road deals to materialize over the last few years, according to sources. Those transactions have been largely designed to restore the financial health of projects that were slammed by the devaluation of the peso in the mid-90s and the subsequent downturn in economic activity.

Project Finance Associates is an even more curious participant, hailing as it does from Chile. This young consultancy was started up by Mauricio Gutierrez, who cut his teeth in toll roads executing transactions for the Santiago office of Santander Investment. Gutierrez set up PFA a few years ago, according to a source familiar with the fledgling shop. The talk is that opportunities in toll road financing in Chile have been dwindling for some time, prompting PFA to trawl in Mexico, Latin America's other main investment-grade country.

The transaction is a securitization of toll receivables generated by a stretch of highway between the cities of Monterrey and Cadereyta. Proceeds will go to the state of Nuevo Leon, which has reportedly earmarked the funds to retire a Ps500 million loan with Banobras and finance works on the Monterrey metro.

The originator is apparently shooting for a final maturity of 25 years.

Copyright 2004 Thomson Media Inc. All Rights Reserved.

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