Citigroup Global Markets is preparing to swipe through a sixth credit card-backed transaction for Panamanian originator Banco del Istmo (Banistmo). Sized at $270 million, the seven-year final transaction is expected to have closed Nov. 19, according to a well-placed source. Rated BBB' from Fitch Ratings, the deal has a five-year average life.

The last issue off the program - a five-year, $150 million deal - closed Sept. 21, 2001, via Deutsche Bank Securities, a miraculous achievement given the attacks on the World Trade Center and the Pentagon just 10 days earlier. Credit card-backed transactions out of emerging markets are typically vulnerable to events that threaten global tourism, since the receivables are generally tied to foreigners traveling for business or pleasure. Banistmo's transactions are different than comparable deals, however, in that a good chunk of eligible receivables are actually originated by locals. This is possible only because the local economy is dollarized, thereby heading off currency risk.

Following post-Sept. 11 drop in travel, "coverage went down, but never to worrying levels," said a source familiar with the deal. As such, the transaction never faltered from its BBB' Fitch rating. The upcoming deal has the same rating.

Currently, tourism and business-related travel account for about 45% of the Banistmo's credit card receivables. Establishments catering to Panamanians supply roughly 55%.

All the other transactions off the program have matured except for the last one, which has about $75 million outstanding. The looming deal is scheduled is start amortizing after the last deal fully pays down. The interest-only period is just shy of two years.

Banistmo has been Panama's largest private bank since 2000. Fitch gives the issuer a foreign currency rating of BB+'. The collateral behind the deal is linked to Visa and MasterCard receivables. The bank presently holds a 47% market share in these two credit cards in its home country, according to a report by Fitch.

Annual credit card receivables processed and settled by the bank have grown steadily, hitting nearly $300 million in 2003.

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