Moody's Investors Service predicts in a report that overall issuance in Latin America will slip this year from the $19.5 billion the agency estimated for 2008. Propped by growth in the region's domestic market, last year's figure marked a slight 2% growth from 2007. Domestic market volumes made up 85% of the total from Latin America.

For 2009, the agency doesn't expect to see much change in cross-border activity from last year, when issuance hit $2.8 billion and was monopolized by banks tapping their diversified payment rights (ASR, 2/2/09). "As has happened in the past, the inability of Latin American top tier banks and companies to attract financing terms on an unsecured basis may cause issuers to turn to future flow transactions," Moody's said.

On the domestic front, the fate of Argentine structured finance is uncertain this year, given the government's recent nationalization of pensions and tax modifications, instituted in August of last year.

In Brazil, Moody's expects issuance to drop in the early part of this year, with a potential recovery later on, as investors seek out products with longer terms. The agency sees a good chance for higher delinquencies in outstanding transactions if the global economic downturn erodes Brazil's economy and pushes up unemployment. Auto loans, which have already seen levels of delinquencies without precedent since 2000, are a particularly vulnerable class.

(c) 2009 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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