Latin Finance - September/October 2009 - 12

Structured Finance RMBS Resistance by remittances and other ﬁnancial receivables. It has hired Credit Suisse for the trade, say people close to the process. DPR Mexican RMBS sprang to life in August with BBVA Bancomer’s deals in Peru and Brazil have tended to carry ﬁve-year tenors 5.9 billion pesos worth of borhis. However, further issuance is and be sized in the $100-$150 million range. Other Peruvian likely to be light. banks including BBVA and BCP are also looking at doing “The panorama is very complicated for private sector DPR issues, say bankers close to those institutions. Another issuers,” says Roberto Guzmán, a Fitch analyst based in issuance from Brazil is also expected, either from Bradesco or Monterrey. Looking ahead, he sees limited ability for the Banco do Brasil, say structured ﬁnance executives. Panama’s country’s top mortgage lenders, such as Banorte, Scotia and Banco General is also planning an issue. As of mid-August, it HSBC, to access borhis. was heard reviewing a short list of banks to arrange the debut As for sofoles and sofomes, the outlook is bleak, and Guzman DPR. And Guatemala’s Banco Industrial, which already has expects little if any borhis issuance from shops like Su Casita, two outstanding DPR issues, is currently studying a third, though the latter is heard planning a sale of hito notes. Sofol Diego Pulido, a director at the bank, tells LatinFinance. Banco mortgage portfolios, which target Industrial has not yet picked lower income earners, have seen a bank for its follow-up issue, Structured Rank by Volume, Year to August 18 sizable jumps in default rates in the which would involve securitizing BBVA hits the top with hefty duo past 12 months. remittances and export credits. Rank Bookrunner Value $m # deals The BBVA trade involved the The bank’s two existing DPR 1 BBVA 575.75 2 sale of 2029 RMBS consisting transactions include a $200 2 Banco de Valores 445.63 28 of three senior tranches which million 2012 notes issue and a 3 Banco de la Nacion Argentina 397.39 1 amortize consecutively. The bank $300 million 2014 bond, he says. priced a 562 million peso piece at 4 Citi 356.26 4 6.14%, a 1.73 billion peso tranche at 5 Ixe Casa de Bolsa 291.06 4 8.04% and a 3.62 billion peso piece By far the biggest LatAm hybrid 6 WestLB 225.00 2 at 10.48%. The bonds are backed by equity issue was Vale’s jumbo 7 Correval 207.02 2 15,100 Bancomer mortgages, all of $941 million convertible, 8 Sumitomo Mitsui 125.00 1 which were current with payments priced July 7. The deal was 9 Intesa Sanpaolo 103.48 9 on the date of pricing. launched and priced within a 10 HSBC 97.44 5 The AAA national scale deal 24-hour period during which the Subtotal 2,824.03 55 comes from a 20 billion pesos company’s shares traded down Total 3,578.31 74 shelf and is only the fourth major 7.2%, versus a 2.3% drop in the Source: Dealogic Mexican RMBS this year. Infonavit Bovespa. The 6.75% coupon was opened the market in May, followed at the wide end of the range, by fellow government-backed lender Fovissste. while the conversion premium came in at 17.5% to the $13.73 As of late August, Fovissste was expected to be the next to tap underlying ADR price, the low end of the range. Both metrics with a single 2039 UDI-denominated tranche, paying ﬁxed rate. indicate a degree of pressure from investors. LF The mortgage lender’s previous bond was a 3.5 billion peso 2039 priced at a ﬁxed 5.31%. Fovissste has a 20 billion peso shelf, from Most Read on the Web which it should issue several times over the next 12-18 months. 30 days to August 19 Banorte, Ixe, BofA Merrill and Goldman Sachs, the same group 1 Ex-Deutsche Banker Launches EM Fund as the previous bond, are managing the upcoming sale. Fovissste 2 UBS Equity Banker Splits and fellow lender Infonavit have relied on this type of simple structure and government-supported status this year to place 4 Cemex Equity Draws Fevered Pitches bonds in an otherwise closed Mexican RMBS market. 5 Cemex Edges Towards Reﬁ Approval Elsewhere in Mexico, Cemex placed in mid-July a 2.2 billion 6 JPMorgan Makes DCM Leap peso 2011 domestic bond backed by accounts receivable. The ABS notes were priced at TIIE plus 250 basis points. 7 Santander Plots Brazil Listing Demand for the AAA paper was a cool 1.3x, according to 8 Brazil Uncorks Duration a banker on the deal. Ixe sole-managed the sale, the ﬁrst such 9 UBS Clings to Brazil, Equities Aspirations transaction Cemex has done in the public peso markets. At the time of issue, the company was mired in a $15 billion reﬁnancing 10 Cosan Wrings Out Yield in New Bond of its bank debt. The ABS proceeds helped the company with Source: www.latinﬁnance.com working capital. Brazil Converts Banks Eye New DPRs UPDATE > At least two LatAm banks are eyeing new DPR programs this year. Peru’s Scotiabank is preparing a new set of bonds backed 12 LATINFINANCE September/October 2009 For daily news on structured ﬁnance, see www.latinﬁnance.com

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Latin Finance - September/October 2009

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