Diversified Payment Rights (“DPR”) as a financing alternative

Diversified Payment Rights (“DPR”) are a form of securitization of future flows, derived from international payments of various kinds. Some of the sources of flows include international remittances, accounts receivable, credit card payments, and foreign trade flows, among other cross-border activities.


In general, the transaction consists of a local company’s (“the Originator”) sale or assignment of assets consisting of flows, expected to be generated in the future, from a commercial activity, in favor of a special purpose vehicle or company (“SPV”) located abroad, in exchange for investors’ investment in securities.


The SPV issues debt securities whose placement in the international securities market is carried out in a market organized under legislation that allows this type of transaction, with the support of a third party, generally one or more investment banks or international financial institutions. In turn, the projected future flows, or DPR, constitute the main source of payment for the debt issued. With the funds obtained from placement of the securities, a liquid payment is generated in favor of the Originator, who uses it as capital to meet commercial and/or regulatory needs.


This type of structure offers an alternative source of financing that may become especially relevant for companies located in developing countries, because it allows them to access more developed international capital markets, with a new investor base, potentially lower financing costs, particularly in medium- and long-term structures, among other advantages.  This can all be accomplished under a complex legal structure that has recognized use and reliability in international markets.  It is used by first-class international banks and multilateral entities.


The international or cross-border element is a defining feature in this type of transaction since natural and legal persons from different jurisdictions are involved. There are generally six main players: (i) the local Originator; (ii) one or several investment banks that advise the Originator in the design and structure of the transaction; (iii) the special purpose vehicle (SPV) located abroad that carries out the issuance of securities whose payment will be made through the DPR; (iv) international correspondent banks, commonly domiciled in financial centers, such as New York or London, which receive the DPRs and, through the transaction agreements, remit them to the investors’ trust bank for payment of the issue; (v) investors who purchase the issued securities; and (vi) a trust bank generally located in the same jurisdiction as the correspondent banks, which receives the funds and makes the periodic payments to the investors. Internationality helps mitigate the sovereign risks that could arise from the transaction if all parties were located in the same jurisdiction.


In this sense, the structure involves different contracts regulated under the laws of one or more countries that establish, among other issues, the terms and conditions of the sale of the DPRs, the issuance of the bonds, their placement in the international market, and the payment conditions, among other things.


This securitization of future flows under the DPR modality is a complex one, subject to various obligations, not only contractual, but also regulatory, financial, tax and stock market regulations.  Therefore, it is common for the transaction to involve several law firms located in the different jurisdictions involved, with experience in this type of transactions and their main challenges. Consortium Legal has stood out for its advice in these transactions throughout the Central American region, assisting banks and originator companies, investment banks, multilateral entities and correspondent banks in the different stages of the transaction.

Regional Team

Álvaro Castellanos



Oscar Samour


El Salvador

José Ramón Paz Morales



Rodrigo Taboada



Mario Quesada B.


Costa Rica

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