Standard & Poor’s Director Eric Gretch said the agency expected financial future flow transactions from new jurisdictions, although he did not offer an anticipated timeline in a video posted on S&P’s Web site.
Financial future flows include diversified payment rights — linked to future remittance payments processed through emerging market banks — and merchant vouchers, related to purchases made by foreign-issued credit cards in emerging market jurisdictions.
“We’re looking at Vietnam, Indonesia, [and there are] also some thoughts that new programs could come out of Panama and Chile,” he said. The last country would be particularly interesting given its high investment grade ratings, which are ‘A+’ at S&P and Fitch and an even higher ‘Aa3’ at Moody’s Investors Service. Traditionally, banks in emerging market issued future flow deals to mitigate sovereign risk.
The S&P video goes on to outline the agency’s revised approach to financial future, which places less emphasis on assumed government support. To see it, click here. Registration may be required.