Securitization Trusts

This form of funding appears to be the most feasible for large public infrastructure works.

Monday, May 4, 2009

The limitations of the state budget to address infrastructure projects require the assistance of private capital, and the securitization trust model is being adopted by Costa Rican public institutions to finance these works.

There are 11 projects in various stages of the formation process of securitization trusts in various sectors such as energy, telecommunications, health, and education.

The article by Stephen Ramírez Castro in Elfinancierocr.com stated that "behind the Costa Rican Electricity Institute (ICE) - a pioneer in the use of this mechanism, entities such as the Ministry of Finance, the Costa Rican Social Security Fund and the University of Costa Rica, among others, are lining up. The collection of all the business plans that doing the due diligence required to activate the mechanism, sum over $2 billion in investments, to be implemented over the next five years. "



More on this topic

More Trusts for Roadworks

December 2013

In Honduras the Continental Bank is to manage a trust fund of $270 million for the construction and maintenance of roads.

This was announced by José Antonio Pineda of the Commission for the Promotion of Public Private Partnerships (Coalianza). He explained that five banks were involved in the process but Continental was the only one to bid.

Trusts Still Stuck in Costa Rica

January 2011

The new regulations for the operation of public work trusts contains provisions which make the process too cumbersome.

Meanwhile, only in Banco Nacional (BN) and Costa Rica (BCR), projects which are held up due to approval for funding through trusts reaches $ 2,760 million. The projects being held up are construction of public works.

Public Investment Securitization in Costa Rica

October 2010

Institutional investors will have the opportunity to diversify portfolios so far composed of government paper.

Investing in public securities will give pension funds operators better returns for their clients, since these projects typically offer additional profits.

Regulations on public investment securities, for projects over $ 3,600 million, expect to assist in funding such projects.

Costa Rica: Public Works Securitization Faces Criticism

June 2010

The mechanism to finance public infrastructure through trusts and securitization has been the target of strong criticism.

Nacion.com reported that “critics argue that there would be very little regulation and almost none supervision of the proposed financial instruments”.

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