The urge to unwrap is pretty strong these days. On both the originating and investing sides of the bench, players are itching to ditch the monoline guarantees that no longer add value.
The Turkish banks that wrapped structured deals en masse from 2004 through 2007 are no different. At least three have taken action on their bonds backed by diversified payment rights (DPRs), refinancing insured tranches with unwrapped deals. In Latin America, Banco Credito del Peru (BCP) has done the same, proving that the pros of unwrapping outweigh the cons in other parts of EM as well.