A deal surfacing in Uruguay might turn out to be the first governed by a trust law that went into effect in late December. Sized at US$20 million, the transaction is a securitization of trade receivables by a public-service company, according to Alejandro Hernandez, a partner at Monte- video-based law firm Ferrere Abogados. "It's already approved," he said, but added that the final OK had not yet come on total disclosure.

Other sectors are also looking

to ABS. Forestry companies, for one, are prime candidates, Hernandez said.

The new trust regime replaces a system of quasi-securitizations, whereby the risk was never fully isolated into an SPV. In the last transaction to close - a rice-related deal for US$35 million (see ASR 1/19, p. 19) - the lead Banco ACAC is formally holding the receivables on its own books. But that deal could, in the future, avail itself of the new law and transfer the receivables to an autonomous trust. At any rate, Fitch Ratings felt the longstanding system, with its own legal underpinnings, was strong enough to warrant A+(uy)' on the national scale.

Because of Uruguay's small size and very recent emergence from a bruising economic crisis, it would be miraculous for the country to yield any cross-border deals in the foreseeable future. Domestic liquidity, however, is on the rise, with pension funds raking in between US$100 million and US$200 million a month, depending on swings in the exchange rate. Overwhelmed by the financial meltdown of its much larger neighbor, Argentina, Uruguay's economy crashed in 2002 following three years of contraction. GDP hit US$12.3 billion that year, from US$18.6 billion in 2001, pulled down by an incredibly shrinking economy and plummeting currency. The economy has been on the mend since last year.

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