Latin Finance - July 2008 - (Page 6)

Structured Finance Back to the Future Flows As the summer sets in, the cross-border structured market remains shut for non-financial issuers. Local markets have picked up some of the slack, providing a trickle of liquidity in Brazil and Mexico. But rough external conditions cause a hostile market for international issuance and the expectation is that this will continue. “Moody’s does not expect to see any local assets being securitized on a cross-border basis for the rest of this year,” says Maria Muller, senior vp at the ratings agency. But for higher-rated banks with exposure to export finance portfolios, however, the MT100 market has provided some relief. Despite expectations at the beginning of 2008 for a weaker year of An estimated $1 billion in MT100, largely from Peru and Brazil, new issuance in Brazil, the local could still make it to market in the market is on track to top 2007 in second half. Structured Finance Rank by Volume, Year to June 23 volume terms, says Norton Bastos, The transactions, which involve Scotia Capital Leads the Way structured finance analyst in Moody’s securitizations of future flows, are São Paulo office. Rank Bookrunner Value $m # deals effectively private placements targeted “In the first quarter, a lot of the 1 Scotia Capital 606.03 3 at large institutional investors and new issues encountered difficulties 2 Ixe Casa de Bolsa 535.14 4 insurance companies. “This is a tried – especially FIDCs,” says Bastos. 3 Santander 440.54 9 and true structure that can be put in Since then, issuance has picked up 4 ING 403.19 3 place relatively easily for bank issuers and will likely continue at a decent 5 Credit Suisse 341.28 1 with a good track record,” notes clip, he adds. 5 Banco Inbursa 341.28 1 Douglas Doetsch, a partner at Mayer According to the CVM, 5 billion 7 Actinver Casa de Bolsa 335.30 1 Brown. reais in FIDC transactions had been 8 Banco de Valores 324.29 38 Among deals expected in July is priced through June 24, while the 9 Citi 316.62 2 Banco de Crédito del Perú, bringing a total amount in 2007 was 9.9 billion 10 BNP Paribas 309.78 2 private placement of $150 million in reais. In real estate, where the CRI Subtotal 3,953.46 59 2015 notes via Wachovia and structure is used to issue mortgageTotal 7,530.73 122 Standard Chartered. This adds to the backed notes, year-to-date issuance Source: Dealogic roughly $900 million the bank as of June 24 was 422 million reais, already has in outstanding future versus 868 million reais for the full flow paper. BBVA Continental is also year in 2007. preparing a $200 million issue via Sumitomo Mitsui. Peru’s Local bankers and investors say offshore demand for ABS Interbank, meanwhile, is heard to have sold $200 million in has waned as spreads on higher quality US and European MT100 FRNs to Credit Suisse. It included a seven-year tranche credits gap out. Meanwhile, Brazilian investor interest in local and had an all-in cost to the issuer equivalent to roughly 7.5%. securitizations has waned thanks to new regulation that makes bank term deposits, or CDBs, much more attractive investments, leading to a migration away from ABS. In Mexico’s local market, Carlos Slim’s infrastructure and Arturo Profili, a partner at Capitania Asset & Risk concessions operating business Ideal landed a hefty securitization Management, a Brazilian asset manager with an ABS-focused shop of highway concession revenues. The issuer had hoped to raise up called CredCapital, sees two emerging asset groups in Brazil: to 11 billion pesos, but scaled back to 7 billion in the face of tepid corporate loans to middle market companies, and RMBS/CMBS. demand, says a banker on the deal. Still, the transaction is the In late June, CredCapital was in the midst of placing a 120 largest local securitization in the region this year, according to million real issuance of notes backed by mid-market loans by Dealogic. Banco BVA. An 84 million real Triple A senior tranche offers The three tranche transaction included a 1.5 billion peso 112.5% of the CDI overnight rate, while an A rated 12 million real floating rate tranche at TIIE plus 28 basis points, a 1.3 billion peso mezzanine piece offers 132.5% of the CDI, says Profili. LF 2036 fixed rate piece at 10.50% and a 4.3 billion peso-equivalent UDI-denominated 2036 tranche priced at 5.69%. The bonds are backed by future flows from the Champa-La Venta, Libramiento de UPDATE la Ciudad de Toluca, Tijuana-Mexicali and Tepic-Villa Union toll For daily structured finance news see www.latinfinance.com roads. The deal is the first master trust in the Mexican market structured so additional roads can be added at a later date, according to a banker managing the transaction. Credit Suisse and Inbursa ran the Triple A rated deal. Elsewhere, TMM Division Maritima is preparing to issue 4.45 billion pesos in 2028 bonds backed by payments from service contracts with Pemex. The transaction is a follow-up to a similar 1.55 billion peso deal placed in May and backed by five-year contracts its service ships signed with the state-owned oil producer. The new deal, involving a different set of contracts, is expected by mid-July. Value Casa de Bolsa is managing the sale. The last was rated AA-. Brazil on Track Big Deal for Ideal 6 LATINFINANCE July/August 2008 http://www.latinfinance.com

Table of Contents Feed for the Digital Edition of Latin Finance - July 2008

Latin Finance - July 2008 Contents Investment Banking Outlook Compensation Survey Colombia Investment Banking Borrowers vs. Investors Banorte Profile Braskem Financing Strategy Brazil Hydro Finance Peru Port Privatization Panama Money Flows Argentina Local Markets Guide to Banking Technology Who Said That?

Latin Finance - July 2008

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