S&P Asgns Banagricola DPR Fnd 2002-1 Prelim 'AAA' Rtg.

Business Editors

NEW YORK--(BUSINESS WIRE)--Standard & Poor's

Feb. 21, 2002-- Standard & Poor's assigned its preliminary triple-'A' rating to Banagricola DPR Funding Ltd.'s $100 million notes series 2002-1.

The preliminary rating reflects a financial guarantee insurance policy provided by XL Capital Assurance Inc. (triple-'A' financial enhancement rating), which guarantees timely payments of interest and principal when due. The underlying collateral for the series 2002-1 notes consists of diversified payment rights generated by Banco Agricola S.A. (Banco Agricola) based in El Salvador. The diversified payment rights included in this transaction consist of Banco Agricola's MT100, specified MT200 (that is, Money Gram remittances and LOC payments), and family remittances generated by Banco Agricola's U.S. agencies.

The preliminary rating also reflects the triple-'B' stand-alone preliminary rating assigned to the transaction. The rating for an electronic money transfer type of transaction is usually constrained by the local currency rating of the bank involved in generating the funds because this institution is responsible for originating future electronic money transfers and making settlement payments to the recipients on a daily basis. The preliminary stand-alone rating is three notches higher than Banco Agricola's local currency counterparty rating of double-'B'. The preliminary rating addresses the ability of the transaction to pay both timely principal and interest, and reflects the following strengths of the transaction structure at the triple-'B' level:

-- The strong credit enhancement levels in the form of overcollaterization with an average of 40.6 times (x) monthly debt service coverage and a base case (stressed) of more than 20.3x;

-- The strength of Banco Agricola, El Salvador's largest bank, as the generator and servicer of the diversified payment rights;

-- The importance of exports to the Salvadoran economy--almost 65% of total exports are sent to the U.S.;

-- The constant steady growth of worker remittances to El Salvador in the past decade. In 2001, the volume of family remittances from the U.S. to El Salvador was just over US$1.9 billion;

-- Banco Agricola's dominant position in the worker remittances business with an estimated market share of 40%;

-- The rapid historical growth of the electronic remittances processing flow for Banco Agricola and in El Salvador in general;

-- The structural features that mitigate sovereign risk and otherwise enhance the likelihood of payments, as established in the transaction documents, such as debt service coverage triggers, the use of an off-shore collection account controlled by the indenture trustee, and the agreements to be established by Banco Agricola and some of its correspondent banks to make payments on the diversified payment rights into a concentration account controlled by the indenture trustee; and

-- A payment structure that provides financial incentives to Banco Agricola to remain in the electronic transfer business during an early amortization event.

However, the preliminary stand-alone rating is constrained by Banco Agricola's survivability assessment. Because a future flow transaction can continue to perform even in times of financial default by the asset originator, a key point of the analysis for Standard & Poor's is the likelihood that an originator, although in default, will not be liquidated and therefore be able to continue generating the future assets sold to the transaction's creditors.

Banco Agricola will sell all of its right, title, and interest in and to all of its existing and future non-treasury wire transfers from U.S. clearing banks as represented by specified SWIFT transactions originated through the SWIFT system for payments to be made in U.S. dollars and family remittances generated by Banco Agricola's agencies in California to Banagricola DPR Funding Ltd., a Cayman Island bankruptcy-remote special-purpose limited liability company (the SPC). Subsequently, the SPC will issue the notes secured by the purchased remittances.

Copyright 2002, Standard & Poor's Ratings Services