Cross-Border MBS Rises

Cross-border MBS volume rose 109% in 2007 to $3.15bn due in large part to the pickup in internationally offered Mexican MBS. A number of issuers tapped offshore markets for the first time for a combined $591m, according to Moody’s. Mortgages were the second most-common asset type to be securitized in LatAm’s domestic markets in 2007. Cross border issuance is, however, vulnerable to the sub-prime mortgage credit crisis in the US, says Moody’s. “A relatively more hostile credit environment for Latin American blue chip companies and top tier banks may translate into higher issuance volumes for [typically domestic] future flow transactions, since market issuers and investors have turned to these structures in the past in times of uncertainty,” says Fernandez Romero.