Mexican bank Banco Nacional de Mexico (Banamex) and Peruvian bank Banco del Credito del Peru (BCP), both issuers of credit card securitizations are now looking into a new asset class: trade payments. Though Turkish banks such as Garanti Bank and Teximbank began issuing trade payment securitizations last year, BCP and Banamex would be the first Latin banks to structure deals backed by these assets.
"Both banks are running out of credit card receivables to securitize," explained a source working on the deal. "So they are looking into other assets on their books, such as trade payments."
Banamex, which is reported to have billions of dollars in trade payments, is working on a deal for the end of the year. The transaction will be wrapped by a monoline and the bank is still shopping for an arranger.
"A trade payment securitization out of Latin America could be an interesting story," said an investor. "But, just like with credit card securitizations, there is always the risk that the bank will default. If that happens the concern is whether it will be motivated to front the money. We didn't participate in the Turkish deals because of those concerns and I doubt that we'll participate in these ones."