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Country Writer: Mr. Ricardo M Arango
rarango@arifa.com
Arias Fabrega &
Fabrega
Tel:+ (507)
205 7000
www.arifa.com
SECURITIZATION
LAWYERS AT THIS FIRM
FIRM
PROFILE
With a practice history spanning over nine decades, Arias Fàbrega
& Fàbrega (ARIFA) is one of the foremost full-service law firms
in the Republic of Panama. The firm currently has 28 lawyers and
over 120 staff in its Panama and London offices and has affiliated
or representative offices in Hong Kong, the British Virgin Islands
and Luxembourg.
SECURITIZATION MARKET STATEMENT
Panama has
been relatively active in the field of securitization in
recent years. Domestic transactions have consisted primarily of
securitizations of residential mortgages. The first securitization
of
this nature in Panama was done by The Chase Manhattan Bank in 1994,
and
since then other originators have used similar structures to come
to
market. The most recent local issues have been listed in the Panamanian
stock exchange and some have been rated by an international rating
agency. On the other hand, cross-border transactions have consisted
primarily of the securitization of credit card receivables and trade
receivables. In this area, the two largest Panamanian banks, Primer
Banco del Istmo, S.A. and Banco General, S.A., have been very active,
as
well as Aracruz Trading, S.A., a subsidiary of the Brazilian giant
Aracruz Celulose, S.A.
The subject gained attention in 1999 when legislation
was introduced to
reinforce the legal framework and to facilitate the securitization
of
credit in Panama. This legislation expressly authorizes the
securitization of existing and future assets, isolates securitized
assets from the bankruptcy risk of the originator and facilitates
notification of payors.
Panama´s flexible corporate and trust laws,
coupled with favorable tax
laws, also position the country as an ideal jurisdiction to establish
special purpose vehicles (“SPVs”) for domestic and international
securitizations.
As securitizations have performed relatively well
in comparison to other
credits in the recent Latin American crisis, we expect to see more
securitizations structured in Panama.
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