The development of Chile's domestic securitization market is gathering pace, with half a dozen transactions in the pipeline following the groundbreaking deal launched in January by Transa Securitizadora. As Euromoney went to press, Transa was about to launch a second offering, consisting of $9.7 million of notes backed by mortgage loans.
Potential issuers believe asset-backed paper will prove highly attractive to institutional investors, with the primary buyers being insurance companies and pension fund managers (Administradores de Fondos de Pensiones - AFPs). Both have an unsatisfied appetite for longer-tenor paper. The AFPs currently have around $28 billion under management, and even a small portfolio allocation into asset-backed bonds will support the growth of a sizeable market.
Securitization has been mooted for some years in Chile, but progress has been held up by delays in passing appropriate legislation. And there is still much...
