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Argentine contagion trounces two Costa Rican MBS deals

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Earlier this year, Costa Rica’s Banco Interfin and Banco San Jose were boasting the highest-rated, non-wrapped, structured transaction coming out of Latin America (See ASR 5/14/01 p.16) with a $62.5 million MBS deal in the pipeline. Though the wrath of Argentina has slashed the deal to pieces, forcing the transaction back to the drawing board.

With Florida-based Raymond James as the banker and a political risk insurance policy from the Overseas Private Investment Corp., Moody’s Investors Service provided a preliminary rating of Aa2′ for the 144A deal. However, as a result of disinterested investors, the deal has sought out a wrap from XL Capital Assurance, and the transaction will now be upped to a triple-A rating.

Sources say that investors shied away from the deal mainly as a result of the Argentine contagion. The deal is now expected to re-launch by the end of this month.

Additionally, Costa Rica’s Corporacion Banex is rumored to be in the pipeline with an MBS deal that has also been wounded by the Argentine storm. Market sources say the deal, arranged by JPMorgan, will not be able to launch this year.

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