Following a $60 million transaction for Lan Chile in the first quarter, Merrill Lynch is ready to close two other securitizations of ticket receivables, this time for AeroMexico and Mexicana.
Mexicana issued $80 million of notes, while AeroMexico increased its offering from $60 million to $65 million following investor interest.
Both deals are backed by ticket receivables purchased with credit cards in the U.S. and wrapped by double-A rated Centre Re.
The notes issued by each airline had identical terms a seven-year final maturity and 4.6-year average life priced at 212bp over Treasuries and were bought by U.S. investors through a private placement.
The deals were launched in early August but met head-on with the speculation about U.S. interest rate hikes.
"It was a difficult moment in the market, but the deal went smoothly," explained a Merrill Lynch official in New York. "We had a good outcome and the companies were pleased to obtain long-term financing."
These are better times for AeroMexico and Mexicana, which were hard-hit by the Mexican peso meltdown of 1995 and had to restructure their debt. Judging from the positive results of their latest transactions, their financial troubles are now in the past.
"AeroMexico and Mexicana have put the 1996 restructuring behind them and have had outstanding results since the new management came on board," said the official. "It's time for the market to look at the entities as they are now."
Though the airlines have enough receivables to structure other securitizations, no deals are expected in the near future.
Meanwhile, DVI, Inc., a U.S.-based provider of equipment financing and related services for users of diagnostic medical technologies, is said to be working on a securitization of leases of medical equipment to Brazil.
The firm offers lines of credit collateralized by medical receivables and has moved into foreign markets where the penetration of equipment such as magnetic resonance imaging machines and lasers is lower than in the US.
According to sources, the company was working on the deal last year but had to put it on hold following the Brazil's currency devaluation. Credit Suisse First Boston will be the lead manager for the transaction, which is expected to be around US$100 million in size. No further details on the transaction were available at press time.