8/2/2019 Prensa: Bolivian Securities Gain International Respect (interview to Jaime Dunn, Best Investment Banker of Bolivia 2

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Nacional Financiera Boliviana Sociedadde Titularizacin S.A. (NAFIBO ST) is theleading securitisation company in Bolivia andthe most innovative in Latin America havingsecuritised future cash flows of small com-panies, cooperatives and NGOs oriented tomicrocredit. NAFIBO ST has also pioneeredthe use of structured notes over the past fewyears, while such products have been largelyout of favour in many countries. Its portfolioof companies is wide ranged, from pharma-ceuticals, cement producers, supermarkets tolarge mining operations and energy projects.

NAFIBO ST is owned by Banco de De-sarrollo Productivo (BDP SAM) a second-tier

bank owned by the Plurinational State of

Boliviansecurities gaininternational

respectAs a centre for Latin American financial conglomerates,

Bolivia, and some of the firms registered there, are gaining

international recognition

Bolivia and Corporacin Andina de Fomento(CAF). NAFIBO ST represents about 65 per-cent of the securities issued in the Boliviancapital markets in the last two years beingone of the largest issuers in the world relativeto its local market. After the Central Bank ofBolivia, through its securitisations, NAFIBONST is the second issuer in the country andholds about 99 percent of the securitisationmarket. Although it is not the only marketplayer, competition is nonexistent for thishigh quality very prestigious company.

moving forward

Considering the deep economic and structur-

al changes carried out in Bolivia by the gov-

ernment, NAFIBO ST has swiftly oriented itsactivities in order to grab a new customer:The State of Bolivia. Billions of dollars arebeing demanded by the government in orderto carry out an aggressive investment plan ininfrastructure and productive endeavours.If we could only grab about 10 percent ofthe financing needs of the State of Bolivia,we would be one of the largest securitisa-tion companies in Latin America says JaimeDunn De Avila, founder and CEO of NAFI-BO ST. The demand for NAFIBO STs serv-ices however are strong from foreign govern-ments and public institutions in El Salvador,Costa Rica, Honduras, Ecuador and as far as

the north of Africa.

60World Finance | Sep - Oct 2010

Banking

8/2/2019 Prensa: Bolivian Securities Gain International Respect (interview to Jaime Dunn, Best Investment Banker of Bolivia 2

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Dunn is the only certified securitisationprofessor by the Congreso Latinoamericanode Fideicomiso (COLAFI) of the FederacinLatinoamericana de Bancos (FELABAN).He has been educated at Colgate Universityin Hamilton New York and holds an MBAdegree from Universidad Catolica and theHarvard Institute of International Develop-ment. Dunn is not only a pioneer on securiti-sation in his own country and Latin America,but has also worked on securitisation norms,regulation and projects in many countries in-cluding Egypt. As a young municipal bondand later on a mortgage-backed securitiestrader in a fixed income securities trader inNew York, came back to Bolivia in the late90s and decided to create what it is today thelargest securities market of its country. Dunnbegan the challenge being a co-author of to-days Securities Market Law of Bolivia andmany of its regulations. He has also writtenseveral books and articles on this issue. Hekeeps busy giving over 40 worldwide semi-nars on securitisation on an average of 11countries per year, promoting Bolivia and its

new highly successful securitisation market.NAFIBO ST holds the most advanced and

best trained specialists in securitisation in Bo-livia and the region. Its a 14 people company(including secretary and cleaning personnel)with more than $600m in securitisations toits name and close to $300m in administra-tion today. Only NAFIBO ST paper holdan AAA rating in Bolivia, says Dunn. Itsinvestors are widely spread from local mu-tual funds, pension funds, international in-stitutional investors and surprisingly a largeamount of retail investors that hold less than$100. Clearly NAFIBO ST is bringing theusually seen as far-reaching securities marketto the common people.

NAFIBO ST securitisation business startsat $1.5m, an amount unheard of anywherein the world, in an area of business whichaverages around $50m. Clearly NAFIBO STstrategy is in harmony with the size of the Bo-livian economy. Bolivia is a landlocked coun-try with about 10 million people and GDPsitting at around $18bn. As one of the poor-est countries in the world, Bolivia has shownan unusual growth in transactions through itslocal securities market. Most of the growthis accounted to NAFIBO STs market opera-tions. Securitisation placements are extremefor NAFIBO ST, beginning around $1.5m,but lately amounts have passed the $150m.Doing a $1.5m securitisation deal is moreexciting says Dunn, Whats more challeng-ing, surgery on an elephants or mosquitosheart? then asks.

NAFIBO STs structured notes with up to100 percent capital guarantee are one of akind since they are completely arranged usinglocal assets. Bolivian treasuries bought to local

pension funds are combined with future cashflows or other riskier assets created even AAArated securities where risk has been perfectlymanaged at a point of almost disappearing.That is the alchemy of securitisation saysDunn, known for using curious magic acts onits seminars to the perplexion of its audience.

international faithAnother interesting securitisation is relatedwith Societe Generale, the prestigious Frenchbank. This involves the securitisation of astructured note fully designed and providedby Societe Generale and re-packaged andsold though a local SPV in Bolivia. Throughthis mechanism, Bolivian investors are able toinvest in various strategies and hedge fundsfully diversified and with a 105 percent capi-tal protection granted by Societe Generale.

In its repositioning strategy in Bolivia andthe region, NAFIBO ST is changing its de-nomination to BDP ST, looking to lever-age on BDP SAM, its largest stock holder andthe most important development-orientedfinancial institution. Through this change,NAFIBO ST is looking to initiate Boliviaas its largest investment banking customer,maintaining an important portfolio of pri-vate companies. NAFIBO ST has seen a greatopportunity in combining the private andpublic sectors as one under new governmentrules Bolivia has what is known as a pluraleconomy, where government-run and privatecompanies must coexist.

Bolivia has been placed in the top two worldleaders in microfinance, with NAFIBO ST inthe forefront. The firm is rapidly becoming rec-ognised on the securitisation world platform ofunusual cash flows and institutions.

BoLiviA hAs

Been pLAced in

the top two

worLd LeAders

in microfinAnce

if we couLd

onLy grAB ABout

10 percent of

the finAncing

needs of BoLiviA,we wouLd Be

one of the

LArgest

securitisAtion

compAnies in

LAtin AmericA

Above Jaime Dunn,

General Manager NAFIBO ST

Left La Paz, Bolivia

61World Finance | Sep - Oct 2010