Just in the nick of time, Mexico closed the 2000 market with a $250 million electronic wire transfer deal marking the first its kind, and sources say Peru may open the new year with a similar deal by next week.
Banco Nacional de Mexico, S.A. (Banamex), the second largest bank in Mexico, sold its rights, title and interest of its existing non-treasury wire transfers from U.S. banks to a bankruptcy-remote, The U.S.$ Diversified Payment Rights Master Trust, in New York, which has issued debt certificates secured by the future flows.
According to Juan Flores of Standard & Poor's Ratings Services, the asset type will generate flows that can be securitized as a result of the over collateralization levels. "It's a good source to tap into," said Flores.
Bank of America acted as the lead manager and XL Capital Assurance Inc. insured the deal. As a result of the financial guarantee financial policy, S&P rated the transaction AAA. The stand-alone rating from S&P was BBB. Moody's Investor Services also assigned a Baa1 rating to the deal, and Moody's does not have a rating for XL.
While Mexico was the first in Latin America to come to market with this type of transaction, it was not the first to establish the structure of the deal. Peru-based Banco de Credito Peru has also been in the market for quite some time with a remittance transaction using a similar structure that was created long before the Banamex deal.
Political unrest in the country has thwarted Peru's structured finance sector (ASRI 11/20/00 p.1). However, sources say the expected $100 million deal led by ING Barings will be wrapped by MBIA and will close within the next week. S&P is expecting to provide a triple-A rating to the transaction.