November 24, 2008

Cover Story

Export-Backed Deals: Is the Pendulum Swinging Back?

The dramatic reversal of fortune for commodity exporters, induced by a plunge in prices and the global liquidity crunch, has altered the terms of financing for a sector that benefited handsomely from the market trends of the last several years. The question is whether they've altered enough to revive the export-backed deals that were a viable funding option before easy money and sky-high prices made them obsolete. While in the near term such a change seems unlikely, the conditions next year will arguably be more auspicious for this sector of ABS than they have been since 2004. 'We've been talking to a lot of investors about what they'd like to see when the markets come back,' said Reggie de Villiers, head of Latin American securitization at Merrill Lynch. 'One thing we've heard is secured export notes.'