Emerging markets

The International Finance Corp. (IFC) is investing $100 million into a fund that will provide coverage at the mezzanine risk level on portfolios of emerging market debt through a synthetic securitization structure.

Guatemala’s Banco Industrial has closed a three-tranche $160 million structured deal, an upsize from the $100 million initially proposed, according to sources close to the deal.

Mexican non-bank institutions known as sofols and sofoms continue to see extraordinarily high delinquencies in their RMBS deals, according to a recent report by Fitch Ratings. Deals among these originators have seen 180-day-plus delinquencies as high as 40%.

Having proven their mettle in crisis conditions, covered bonds are gaining popularity outside their traditional enclave of continental Europe. A number of emerging markets are looking into the product, and a few have recently made concrete moves. Turkey, for instance, saw its first covered bond a couple of months ago.

Paper company Sappi has implemented its three-year €360 million ($517.3 million) trade receivables securitization program for its non-South African businesses.

Two new Japanese credit card receivable securitizations that total of JPY4 billion ($52 million) are in the market.

An Australian CMBS issued by building society IMB called Illawarra Series 2011-1 CMBS Trust is in the market. The A$202.56 ($ 212.68) transaction is the third CMBS for the issuer.

Several units of Mexican cement maker Cemex recently closed a 4.2-year, Ps2.5 billion ($204 million) facility backed by their trade receivables, according to a release by Finacity Corp., which arranged the deal. Ixe Casa de Bolsa was the sole underwriter. Both HR Ratings and Standard & Poor's rated the deal triple-A on their respective national scales.

Moody's Investors Service's index of cumulative defaults for Spanish RMBS rose to 1.98% of the original balance in June compared to 1.89% in March.

Recent modifications made by Turkey’s Capital Markets Board to covered bond legislation are a credit positive, said Moody’s Investors Service in a recent report.

Cadwalader, Wickersham & Taft hired Jeffrey Chen for its Hong Kong office as partner. Chen, formerly with Mayer Brown JSM in Hong Kong, will be a part of the capital markets team.

A Brazilian regulation that goes into effect today ratchets up the default probability of mezzanine tranches in domestic ABS, said Moody’s Investors Service in a release.

BNP Paribas hired Christian Wulf as director in charge of Latin America for the firm's aviation finance group.

Greek bailout talks intensified once again this July, a repeat in many ways of last summer's discussions. But structured finance issuance is taking it much harder this year, as Nora Colomer examines in the cover story. In July two actively marketed European securitizations were abruptly pulled when the market got too volatile. Other issuers went the retained route rather than face the risks associated with bringing new-issue deals to market.

Turkey’s debut covered bond consists of three tranches pricing between 200 basis points and 250 basis points over Euribor, a spread that will be swapped into a Turkish rate for originator Sekerbank at the time of the closing, said Huib-Jan de Ruijter, director of financial markets at Dutch development bank the FMO, one of the investors in the deal.

Moody's Investors Service has given a provisional '(P)A3' rating to covered bonds to be issued by Turkey's Sekerbank, the agency said in a release.

Mexican banks appear to be moving down the food chain in mortgage lending, according to a release by Moody’s Investors Service.

Fitch Ratings has released an update to its criteria on existing asset securitization in emerging markets. The rating agency detailed the impact and potential risk of a sovereign default on transactions within these countries.

While in the United States efforts to create more new-issue-rated RMBS are just starting to gain a little more momentum and the latest economic indicators at press time have not exactly been rosy, RMBS Down Under have been doing relatively well.

Portugal and Greece won't lose access to European Central Bank (ECB) liquidity, said the ECB in separate announcements.