Growing demand for risk management has spawned yet another speciality company: Enhance Structured Products, a subsidiary of Asset Guaranty Insurance Co.
"The group was set up to provide customized credit risk transfer products to global corporate and financial institutions," explained newly appointed president, Paul Palmer. "We help clients in Latin America and other parts of the world to measure and manage their complex credit risks."
Though Enhance Structure Products provides insurance wraps (which are rated AA by Standard & Poor's and AAA by Duff & Phelps Credit Rating Co.), it aims to take the insurance business a step further.
"The fields of banking and insurance are converging and our department is set up to effectively bridge the gap between them by providing consulting and marketing services," Palmer explained. "We are being a bit more proactive in helping the clients assess what makes more sense for them."
Enhance Structured Products got its feet wet in the Latin market when it worked with Mexican bank Banorte on its $300 million securitization of non-electronic remittances (ASRI 7/28/99; p.10).
The oversubscribed offering was Banorte's first securitization and the first remittance deal to achieve a seven-year term and to feature an insurance tranche. Three other Latin deals are in the pipeline as well as deals in Europe and Asia.
The new group expects Brazil and Argentina to be its major sources of business in the Latin arena. "We are looking for companies with good fundamentals and franchises who have a need to use their capital more efficiently," he said. "In both of those countries you have the elements we are looking for."