Category: Regions

Mexican mortgage lender Hito has sold MXP3bn-equivalent in mortgage-backed bonds. The 2042 UDI-denominated bonds pay interest at 5% and have a weighted average life of 4.05 years, Hito says. The bonds are backed by 16,000 loans from state lender Fovissste, and represent the first time Fovissste’s loans have been securitized by Hito, which is known for using the so-called Danish model of securitizing loans as they are originated. This year, however, it has offered to securitize existing mortgages from Mexico’s lenders in order to help them better withstand the effects of the credit crisis. Intercam managed the sale, rated AAA on a national scale.

Mexico’s congress approved late Monday its 2010 budget, though analysts say projected shortfalls could bring a ratings downgrade. RBS says in a report that S&P and or Fitch could cut the country one notch to BBB, though the impact on the Mexican sovereign bond levels would be marginal. Likewise, JPMorgan says in a report that it expects at least a Fitch downgrade to BBB. Even if these moves come to pass, Mexico would still be a long way from losing investment-grade status. “I see very little impact on the ability to get financing,” Benito Berber, macro-strategist for Latin America at RBS, tells LatinFinance, noting that if the downgrade to BBB happens as his shop expects, the markets have largely priced it in. He adds that if the agencies language when taking such an action conveyed more risk ahead and the possibility of further downgrade, the markets might see effects not already priced in. After a long struggle, lawmakers agreed to raise the value added tax rate to 16% from 15% and increase the top income tax rate to 30% from 28%, according to local news and wire reports. It is also including tax increases on beer, cigarettes and telecommunications in an attempt to broaden the government’s revenue base and reduce dependence on declining oil revenues.

Mexico-based Banco Azteca has inaugurated bank operations in El Salvador with 29 branches throughout the country. It says it will offer loans, savings and investment accounts to customers. Banco Azteca has more than 9m active loan accounts and more than 8m deposit accounts in LatAm. It is a subsidiary of Grupo Elektra a leading financial services company and specialty retailer in LatAm.

Temasek, the Singapore sovereign wealth fund with $127bn in assets, is interested in Mexican infrastructure investment. President Felipe Calderon met Temasek group head Suppiah Dhanabalan last week at APEC annual meetings. “The chairman of Temasek expressed the interest of his group in investing in Mexico, in diverse projects such as the financial sector and ports,” the Mexican government says in a statement.