Though Overseas Private Investment Corp.'s (OPIC) new political risk insurance has its first Latin American deal in the market and several other transactions in the pipeline, investors and ratings agencies continue to debate its merits, and differ over whether it will have enough momentum to stymie asset-backed issuance, as some have predicted.

Designed to protect emerging market transactions against the risks of transfer and convertibility (ASR 8/9/99), political insurance such as OPIC's is seen by many as an effective way to pierce the sovereign ceiling. So much so, that many companies are now pitching deals to investors without an asset-backed component, relying solely on insurance provided by OPIC or Zurich U.S. Political Risk.

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