Interbank is looking across the border. Barclays Capital has snagged a mandate from the Peruvian bank for what promises to be the country's debut securitization of diversified payment rights (DPR) sold into the market, according to sources. With Mayer Brown Rowe & Maw as counsel, the originator aims to tap US$80 million in a seven-year final maturity, 4.1-year average life non-144A private placement. The roadshow kicked off late last week, and Fitch Ratings has rated the transaction a preliminary BBB-.'

The structure will resemble the MT-100 transactions that have streamed out of the Brazilian banking sector over the last few years. The asset base, however, should be more diversified than recent Brazilian deals, said a source. "A significant portion is coming from exports, but also from tourism services and other sectors," he said. A Fitch report cites capital flows and individual remittances such as foreign investment proceeds as other generators of receivables.

The rating on the deal pierces the sovereign ceilings of BB-' for obligations in foreign currency and BB+' for those in local currency. Fitch believes sovereign risk is mitigated by the true sale of the receivables into the SPV and other features of the future flows structure. With the exception of the bill-of-sale, all transaction documents are subject to New York state law, the agency said.

The bank's DPR flows peaked at US$677 million in 1997, buoyed by unusually heavy foreign direct investment (FDI) and healthy commodity prices. They dropped off in subsequent years, but recovered narrowly in 2002, hitting US$369 million. Tourists are picking up the slack of waning FDI. Tourism and service-related flows accounted for roughly 40% of DPR flows last year.

Fitch has Interbank's foreign currency long-term and short-term ratings at BB-' and B', respectively. Over the last two years, Interbank has simultaneously boosted its size and financial performance, according to the agency. It operates a network of 89 branches and ranks fourth in size in Peru's concentrated sector. Banco de Credito Peru (BCP) closed a US$100-million deal backed by diversified payment rights in early 2001. That transaction was dropped into a conduit.

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