Roberto Zamora, a Miami-based Nicaraguan, has long been working on building a capital market in Central America and the Caribbean, an area often regarded as a financial barren land.

Through the Latin American Financial Services Corp. (Lafise), he and his associates provide specialized financial services to multinational corporations, banks, governments, multilateral organizations and individuals with operations in the area.

When the Overseas Private Investment Corp. (OPIC) announced that it was stepping into the MBS arena, Lafise saw a great opportunity to expand its operations in Central America. Now, the group is working with OPIC representatives on Nicaragua's first MBS deal, scheduled to launch in June.

"We want to try and maximize the benefits of OPIC's policy to jump-start the housing industry in Central America and the Caribbean," said Zamora. "The idea is to create a model that will later be used by Honduras, Dominican Republic and other countries in the region."

Lafise plans to issue approximately $50 million in notes backed by housing projects in Nicaragua. The notes will benefit from OPIC's MBS insurance and will be sold to institutional investors in Central America and the U.S.

Lafise is particularly well positioned in the area. Created in 1985, the group has offices in Panama, Dominican Republic, Nicaragua, Honduras, Guatemala, El Salvador, Costa Rica, Venezuela and Miami.

The group has acted as underwriter for several U.S. dollar and local currency commercial paper offerings as well as corporate bond and stock issues for private sector clients. Most notably, in 1994 and 2000 it underwrote two $30 million bond issues for El Salvador-based TACA International Airlines. TACA is the largest private employer in Central America and the offerings stand out as the largest bond issuance from the region to date.

"We have been working on other securitization deals as well," said Zamora. "Several players are interested in doing this type of deal but there is nothing concrete thus far." In the case of Nicaragua, the upcoming OPIC-backed transaction may be a first step toward a secondary mortgage market, he added.

"I think that Nicaragua has a long way to go before we'll see an active MBS market," said an expert in housing finance who is working on a similar deal in the Dominican Republic. "They need to concentrate on the primary market right now and in creating a robust infrastructure that will allow for timely foreclosures and evictions. That said, they do have the willingness to do all that and the ability to re-craft their entire housing system. I think that a lot of interesting things are going to come out of Nicaragua."

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