MIAMI – Seizing on the multiplying opportunities in Latin America’s domestic markets, the International Finance Corp. is growing its structured finance group, according to Lee Meddin, global head of structured finance for the private sector funding arm of the World Bank.
Talking on the sidelines of Euromoney’s Securitization in Latin America Summit, Meddin said he aims to hire a clutch of new people, and has identified five openings already.
The group he directly oversees in Washington D.C. currently numbers eight, with additional support from regional offices throughout emerging markets. The multilateral, which offers unfunded guarantees on the mezzanine risk of deals, is roaming all the major domestic emerging markets for transactions. In Brazil, it is planning to introduce a new product, known as a credit-linked guaranty. The product is an enhancement bound to the behavior of Brazilian sovereign debt, but which can only be called if certain obligations are current.
“That means our guaranty is no better than Brazil, so it’s equal to an international double-B [rating],” Meddin said. On the national scale, the guaranty would be worth a triple-A, on par with government treasuries. The IFC won’t provide a full wrap in the style of monoline insurers because it wouldn’t allow the multilateral to share the risk with other issuers, one of the ways it seeks to promote local market development.
India is also on the IFC’s agenda. Some participants at the Latin America summit likened the nascent economic force to Mexico, at least in regards to housing finance. “India could be our biggest market next year,” Meddin said. New reforms have brought the country in line with international norms and made the economics of securitization more attractive.
Commercial vehicles, two wheelers, and mortgages are among the most promising asset classes on the subcontinent, said attendees.
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