XL Capital Assurance is getting cozy with Central America. After wrapping a bond backed by diversified payment rights (DPR) for Banco Cuscatlan, the guarantor is doing the same for El Salvador's Banco Agricola. Sized at US$60 million, the Agricola transaction is being handled by Wachovia Securities, marking the underwriter's debut transaction in the Latin American structured arena (see ASR 9/15, p.1). Standard & Poor's has given the Agricola deal, also backed by DPR, a BBB' stand-alone rating. The surety, of course, takes that to AAA'.

The deal covers all flows through Agricola's U.S. agencies. In a report, S&P said that the bank held an estimated market share of 40% in the worker remittance business for 2002. The total volume of these flows from the U.S. to El Salvador was US$1.9 billion last year.

The transaction has a final legal maturity of seven years, with a weighted average life of 4.58 years. Banco Agricola is the largest bank in El Salvador.


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