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The US treasury market reaches breaking point

The US treasury market reaches breaking point

The structural issue that could cause the world's market of last resort to grind to a halt

No. 6: If you don’t give it to me you’ll only lend it to someone else and look where that got us

No. 6: If you don’t give it to me you’ll only lend it to someone else and look where that got us

10 reasons to tell your boss you deserve a bonus

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July 2001

Bonds backed by pure life





       
Costa Rica: beaches, volcanoes and securitized mortgages

Pity the securitization banker, spending endless days in gloomy Detroit or tedious Wilmington, Delaware, arranging auto loan or credit-card deals. Wouldn't it be better if asset-backed securities were issued from tropical locations with gorgeous beaches and spectacular volcanoes?
Well now they are. The Central American paradise of Costa Rica has become the latest country to embrace securiti-zation. Two Costa Rican banks have launched the country's first mortgage-backed bonds. Banco de San José and Banco Interfin hope to issue $62.5 million of 15-year bonds in a deal arranged by Florida investment bank Raymond James.
Legal changes introduced several years ago paved the way for securitization in Costa Rica. But until recently, there were few assets to securitize. The country where the national catchphrase is pura vida (pure life) embraced a stable but statist social democra-tic system in 1949. Private banks were banned until recently, but they now issue credit cards, make car loans and extend mortgages. The business is booming. Private banks are originating around $2 million every month.
Although banks in other Latin American countries have securitized consumer assets, they have tended to issue domestic bonds in very small quantities. But with only limited pools of local capital, that makes little sense in Central America. Furthermore, the region is already dollarized in all but name, making it easier for banks to tap the deeper capital markets of the US and beyond.
The next few months will see quite a few deals from the more dollarized countries in the region and for securitization bankers and analysts alike, there could be a few more pleasant trips on the horizon.







In many cases, MENA hedge fund managers are little more than long-only managers charging hedge fund fees

Francis Akpata of family office Acropolis Capital

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