Since 1995 Fitch Ratings has rated over 80 notes backed by diversified payment rights (DPR). The majority of issuances have come from sponsor banks in Latin America and Turkey, according to a new Fitch special report that discusses DPR securitizations from both sides of the Atlantic.
A DPR transaction is a financial future flow securitization used by financial institutions in emerging markets to obtain attractive access to international capital markets. Collateral comprises future and existing payment rights related to export payments, foreign direct investment, and worker remittances.
The special report titled 'DPR Securitizations from Lima to Istanbul' includes a detailed peer comparison of DPR programs currently rated by Fitch. Active programs maintain relatively high monthly debt service coverage ratios, and in most cases DPR flows have returned to pre-crisis levels.
Globally, Fitch-rated DPR programs feature relatively uniform structures and systemically-important sponsor banks. The nature of remittance flows varies; Peruvian DPRs are heavily tied to the mining sector while Turkish flows are well-diversified across industries.
The full report is available at 'www.fitchratings.com' or by clicking on the link above.
Additional information is available at 'www.fitchratings.com'
Applicable Criteria and Related Research:
--'Future Flow Securitization Rating Criteria' (June 19, 2012);
--'The Test of Time - Future Flow Stress Cases - 2010' (Sept. 9, 2010).