It's unlikely that crime and sickness have ever looked so good to Chilean ABS players, as a recent securitization of subsidies to build three prisons could infect others in the same sector and in hospitals. "It's a structure that could be replicated," said Cristian Fuenzalida, associate director of project finance in the Santiago office of Fitch Ratings. Fuenzalida added that the government is holding an auction on another prison soon and expects next year to start selling hospital concessions to private operators. "Others could use the same system" as the debut deal, he added.

Santander Securitizadora was the first arranger to cozy up to the corrections business. On Sept. 29, the securitizing agent led a three-tranche deal for Sociedad Concesionaria Infraestructura Penitenciara Grupo 3 that matures in March of 2017. Sized at 3.66 million inflation indexed units (UF) ($125 million), the A tranche priced at 3.5%. In total, the deal amounted to 4.14 million UF. On its national scale, Fitch rated the A piece AAA(chl)' and the B piece, worth 479,000 UF, A(chl).'

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.