Mexican originator Su Casita issued a two-tranche RMBS last week via sole lead Credit Suisse, reminding players that Latin America's catatonic cross-border market in ABS and MBS did, indeed, still have a pulse. The transaction was apparently the first time MBIA has publicly wrapped a deal from Mexico's real estate sector, which had already witnessed participation by rivals Ambac, FGIC, and FSA.
With the triple-A from Fitch Ratings and Standard & Poor's, a $233 million dollar tranche priced at 23 basis points over one-month Libor. The weighted average life is 8.1 years. A tranche denominated in inflation indexed units (UDIs) for the equivalent of Ps227 million ($21 million) priced at a real rate of 6.47%. The subprime bogeyman that has spooked other markets had no impact on the Mexican deal.
"[Participants] made a big effort to differentiate the deal from subprime," a source close to the deal said. Apparently, the deal priced off the same desk at Credit Suisse that handles RMBS, including deals with subprime risk. While that sector wasn't a problem, the pullback in liquidity for emerging markets in general made the market climate less favorable than it had been until recently, the source said.
The transaction was both 144A and Reg S, which drew new investors into the local currency paper, the source said. The transaction settles April 2.
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