Two recent remittance securitizations out of Mexico seem to highlight investors' ease in buying securities that are backed by hard currency.

Banc of America Securities recently closed an oversubscribed securitization of U.S. dollar cash flows generated by non-electronic remittances for Mexican bank Banorte.

The offering, which was increased from $250 million to $300 million, was Banorte's first securitization.

The deal was structured in two tranches: a $200 million wrapped piece, and a $100 million unwrapped chunk. The wrapped tranche had a seven-year final maturity, received a double-A credit rating by Standard & Poor's and priced at 150 basis points over Libor. The uninsured tranche, had a five-year final maturity, a Baa1 credit rating from Moody's and priced at 325 basis points over Treasurys.

Though securitization of remittances by Mexican banks are not unusual, the oversubscribed deal was a significant achievement for Banorte, Mexico's third largest bank. The paper was placed with both U.S. and foreign investors. - Tamar Hahn

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