Mexican Domestic Issuance Lags Slightly Behind 2006

Mexico 's domestic structured finance market turned out about Ps42 billion ($3.8 billion) in securitizations in the first seven months of the year, according to a report by local brokerage IXE. The figure is the sum of three sectors: CDOs, future flows, and ABS, which includes MBS. It is only a sliver over half the Ps80.3 billion in volumes posted for all of 2006, an indication that this year is lagging a bit behind. The culprit, bankers, isn't so much a liquidity retrenchment as competitive pricing from banks. Real estate receivables keep powering the Mexican securitization machine, accounting for the lion's share of volumes in the first seven months.

Still, the future flows space did produce at least one novel transaction in July, as highlighted by IXE. Transportacion Maritima Mexicana securitized current and future payment from Petroleos Mexicanos, one of the largest oil companies in the world. Rated double-A on the national scale by Fitch, the 20-year deal came to Ps3 billion, and priced at 225 basis points over TIIE. More is on the way, with the debut making up only a third of the registered program, according to a source close to the first deal.