Why Structured Finance Activity Will Likely Spread Across E

Standard & Poor’s expects structured finance activity to increase and diversify across emerging markets in 2013. In this CreditMatters TV segment, Director Eric Gretch discusses the outlook for 2013 in emerging markets. Topics include the implications of a rebounding Mexican economy, Brazil’s uncertain regulatory environment, and domestic and cross-border issuance in Russia, South Africa, Turkey, and emerging Europe.

Welcome to another edition of credit mothers-to-be my name is wanda mullane and i’m the head of the emerging market structure finance team today we are joined by eric gretsch a director in the structured finance emerging markets team to discuss about the recent piece of research the standard & poor’s has published eric welcome thank you for having me recently

Standard & poor’s has published a research report talking about the securitization market and instructor finance market in emerging markets for 2013 and beyond what are the expectations and co can you provide us an overview of the structured finance markets in 2012 2012 was a very strong year in the emerging markets for structured finance both across latin

America and amia or eastern europe middle eastern africa we had record issuance volumes along in latin america our principal markets at this point our mexico brazil and argentina with an increasing growth in peru and the other andean countries and amia we’ve been having pretty strong growth across sub-saharan africa including south africa russia as well as some

Increasing growth in countries like turkey overall issuance volume 4 2012 reached about 25 billion across the emerging markets in the report you mentioned that there will be all we are expecting to see further growth and diversification across emerging markets what are the expectations for 2013 sure what we expect to see continued deepening of consumer and kappa

See also  Calculate the Finance Charge & Find the Average Daily balance||MMW

Consumer and financial markets across the emerging market space especially in countries such as south africa mexico in russia going forward we expect to build on some of the momentum from this year we saw landmark transactions like the first covered bond in latin america from global bank in panama the first local market avs deal in russia in the form of consumer

Life finance as well as new synthetic and unique structures in the repack space in sub-saharan africa in the northern lights transaction as well as the commissioner street five transaction in south africa with new regulations and the financial system still rebuilding across markets what are the challenges for the coming year across these markets sure there are some

Challenges i mean issuance volume could have been stronger this year although regulatory changes in brazil stymied some of the growth there issuance volume in brazil was about half of 2011 that’s based upon two aspects one is the reform of the cd key market by the local market regulator they will come out with the final rules into that in first quarter 2013 and we’ll

See going forward but our speculations are that the regulation will make the market stronger and will actually provide a better base for growth also there were some recent challenges in 2012 as many people are aware with the insolvencies of bangkok rossetto and banco bba which raised some concerns over operational issues such as commingling funds for transactions

And the accuracy of collateral in the report you mentioned several hotspots in 2012 including south africa russia and also some frontier markets like colombia and chile what are the hot spot to look for in 2013 so we’re excited for 2013 and we do believe there are a lot of hot spots first and foremost across in the email region we’re focused on russia and we expect

See also  PCP CAR FINANCE EXPLAINED | The ultimate beginners guide (2021)

To see continued growth in the residential mortgage market within russia mostly on a domestic basis this is being driven by key players like a hml and veb we’re providing the made demand for securitization of our residential mortgages we also see a great demand and interest in commercial mortgages that are starting to be originated across russia also there’s been

Some new insight into potential room for covered bonds throughout the amir region including russia turkey even in the sub-saharan africa continent additionally we think there could be an interesting growth story in the application of future flow technology in the sub-saharan market and this is based upon our experience in latin america in the early 2000s where the

Region was characterized by sub investment-grade countries with originator zeeeee with strong cash flow streams from offshore obligor ‘he’s looking to leverage those offshore flows and mitigate sovereign risks and we believe that the application of this technology can be very apropos for the sub-saharan market also we expect significant growth out of the mexican

Structured finance market as their economy continues to rebound into 2013 off of impressive growth throughout 2012 thank you erika finally in terms of new markets or even new assets what do you believe investors will be focus on in next during this year so i think some of the more frontier markets we could see some activity out of israel cost savings on structured

Finance issuances visa v senior unsecured debt are about are pretty significant i’m you’re looking about half the cost right now for structured finance issuances depending upon the targeted rated category also were actually keenly focused on the indian region including chile peru and colombia and we think we could see further developments in colombia and ultimately

See also  Daml Conversations: Smart Trade Finance Daml Project [2022]

We think that the cross-border markets can begin to return especially in regards to latin america in 2013 as the us economy rebounds thank you eric the report that we have just discussed is available at standard and poor’s website at www standard & poor’s com you can find these another relevant information in this website please check it out thank you so much

For this edition of credit model tv see you next time you you

Transcribed from video
Why Structured Finance Activity Will Likely Spread Across E By S\u0026P Global Ratings