Mexico remains the undisputed nerve center of securitization in Latin America. Since the last week of March, the peso market has absorbed Ps2.9 billion ($259 million) in structured deals, while the pipeline bodes well for activity over the next couple of months.

In the toll-road sector, operator Concesionaria de Carreteras Autopistas y Libramientos de la Republica Mexicana issued a 15-year final transaction for 298 million inflation-indexed units (UDIs), which currently add up to roughly Ps1.1 billion. The transaction priced at a real rate of 6% and was sole led by Inversora Bursatil. Rated' by Moody's Investors Service, the deal is backed by tolls generated along a 238-kilometer stretch of highway connecting the city of Tepic in the state of Nayarit and Villa Union in Sinaloa.

Proceeds from the transaction will finance both work on a currently operating tolled section of the road and construction in a new section granted as part of a government concession, according to a report by Moody's. Hand-in-hand with the bond deal, the operator has secured an irrevocable line of credit for up to Ps750 million bearing an inflation-indexed rate of 6.5%. The line of credit will rank pari passu with the bond deal, Moody's said.

The operator was awarded a 30-year concession to build, operate and maintain the road, which has been functioning since the 1950s. Under Moody's base scenario of a 5% annual growth in traffic from 2006 to 2009, debt service coverage levels are projected at 1.4x over the next few years. While there is a free alternate road, it doesn't represent a serious threat to revenue on the toll road, given that the latter saves drivers 20 to 40 minutes of travel time in each of five sections. Passenger vehicles account for roughly 75% of the toll road's traffic; commercial vehicles make up the other 25%.

The operator of the transaction is a unit of Impulsora del Desarrollo Economico de America Latina (IDEAL), which is, in turn, part of Grupo Financiero Inbursa. Carlos Slim Heliu, one of the world's wealthiest men, owns Inbursa.

Also pricing in Mexico was a second securitization from Intra Mexicana, a unit of retail conglomerate Elektra. The transaction reached Ps1.25 billion and had a legal final maturity of eight years. Pricing came to 260 basis points over 3-month TIIE. Value was the sole lead. Fitch Ratings rated the transaction AA-(mex)' on the national scale.

Collateral for the deal is comprised of fees on transferring electronic money, which is Intra's main business line, conducted through its Dinero Express service. Dinero Express is offered at 1,074 branches found in 322 cities throughout Mexico. "The brand Dinero Express has a strong positioning in the market, thanks in large part to the extensive reach of Elektra's stores," Fitch said in a report.

The deal comes two years after Intra's debut for Ps2.6 billion. Fitch rated, and affirmed, the maiden deal at AA+(mex)', two notches above the second issue. The discrepancy is basically due to the latter's subordination. Currently the issuing trust holds Ps640 million pesos in flows, more than enough to make the first amortization payment of $260 million for the 04 series, according to Fitch.

Elsewhere in Mexico, GMAC Financiera issued an RMBS for 143 million UDIs or roughly Ps526 million. With HSBC as sole lead, the transaction had a final legal maturity of 30 years and pricing was a real 5.6%. The deal carries a partial guaranty from the International Finance Corp. for the equivalent of 10.95% of the outstanding volume. Thanks to that, and other enhancements, the transaction was rated triple-A on the respective national scales of Fitch, Moody's, and Standard & Poor's.

GMAC purchased the loans for this particular deal from Credito y Casa and Su Casita.

Credito y Casa preps

novel RMBS

Credito y Casa is busy on another front as well. The originator is working on its own RMBS for around Ps500 million, as the first tap on a Ps3 billion shelf. The issue will be structured so that it can be re-opened, with more mortgages thrown into the pool over time, an approach that is new to Mexico. "This will give the issue liquidity," said Augustin Gomez, head of funding for the originator. The legal final is projected at about 25 years at issuance. Gomez said IXE will place the deal, and all three major ratings agencies will grade it.

In other RMBS news, originator Metrofinanciera is planning a deal of roughly Ps500 million pesos. This would put the total issued off a Ps5 billion program at Ps2 billion, according to a source familiar with the company. IXE is the sole arranger.

Finally, toll receipts from a highway linking La Venta and Punta Diamante in the state of Guerrero are marked for securitization. Arka will be the placement agent, according to a preliminary prospectus on the website of the Mexican Securities Exchange.

(c) 2006 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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