Dim Hopes for Mexican ABS Return

While Mexico’s local debt markets show signs of life, bankers and investors foresee a slow return of structured debt transactions to pre-crisis levels. “I’m completely sure that we will see new ABS deals in the near future and also some RMBS that aren’t from government-backed issuers,” says Ricardo Cano, head of DCM at BBVA Bancomer. However events in the last 2 years have taught investors important lessons. “We’re going to see a divergence between ABS issuers this year – some will be able to come back to the market faster than others,” says Cano. Sergio Mendez, CIO at Afore XXI, agrees, saying investors will have to work harder to differentiate between issuers in terms of quality. As government lenders Fovissste and Infonavit prepare to place between MXP10bn-MXP20bn in RMBS each this year, prospects for private issuers are more limited. Banks are the most likely issuers, with BBVA Bancomer among prime candidates, according to investors and DCM bankers away from BBVA. They note that deals will be smaller than pre-crisis, when transaction volume could reach MXP4bn-MXP5bn. Infonavit is preparing to issue MXP5.69bn in RMBS March 10, and Fovissste MXP4.5bn March 24. Cano and Mendez spoke on a panel at LatinFinance’s 5th Cumbre Financiera Mexicana in Mexico City last week.