Category: Structured Finance

Titularizadora Colombiana capped off a COP385bn ($188m) RMBS sale with the placement of COP253bn in the domestic market. It sold COP145bn in 2019 bonds at 7.69%, COP71bn in 2024 bonds paying 9.00%, COP28bn in subordinated 2024s at 11.50% and COP9bn in 2024 mezzanine bonds at 12.00%. The sale, done through an underwriting process, follows Wednesday’s sale of COP133bn in 2019s through an auction that paid 7.69%. Proceeds from the transaction, rated AAA on a national scale, will strengthen Titularizadora’s lending capability. The notes are backed by mortgages originated by BBVA, Davivienda and Bancolombia. Titularizadora structured and managed the issue itself as a placement via several local brokerages.

Titularizadora Colombiana has sold COP133bn ($65.5m) in 2019 RMBS through the first portion of a domestic market sale worth up to COP386bn. The bonds priced at a fixed 7.69%, the result of an auction which saw demand reach 1.7x the offer, Titularizadora says. The issuer returns to market today with an underwritten sale including up to COP144bn in additional 2019 bonds, COP71bn in 2044 bonds, and COP37bn in subordinated and mezzanine bonds. Proceeds from the transaction, rated AAA on a national scale, will strengthen Titularizadora’s lending capability. The notes are backed by mortgages originated by BBVA, Davivienda and Bancolombia. Titularizadora is structuring and managing the issue itself as a placement via several local brokerages.

Fresh off last week’s MXP1.5bn RMBS issue, Infonavit plans to offer a similar -MXP2.0bn sale in early September, Joaquin Escamilla, director of its Cedevis mortgage-backed bond program, tells LatinFinance. Details are still to be finalized, but it is expected to follow the same UDI-denominated single-tranche structure as this month’s placement of MXP1.5bn in 2031 RMBS at a fixed rate of 5.32%. The deal capitalized on residual demand from a MXP2.6bn sale – which was 1.8x subscribed – in July, Escamilla explains. Infonavit has placed MXP6.1bn of the MXP10bn-MXP15bn it is aiming to raise by the end of the year. “If we continue to see the appetite we’ve seen this year, we should be able to issue MXP15bn,” he says. The simple structure and working closely with investors have been key to the government-owned lender’s placements in a skeptical market, he says. Other borrowers will find it even harder. “The panorama is very complicated for private sector issuers,” says Roberto Guzman, a Fitch analyst based in Monterrey. Even the country’s top mortgage lender banks, such as Banorte, Scotia and HSBC, which generally have mortgages issued by clients in a higher income bracket, are unlikely to find it feasible to access the borhis market, adds a local DCM banker.

Mexican RMBS issuers face extremely challenging borrowing conditions, but some are trying to source liquidity with a structure developed by Hipotecaria Total (HiTo). Erstwhile frequent RMBS issuer Su Casita – which has been shut out of the market for months – is preparing to issue a new note worth around $100m that could carry an average tenor of 7 years, say people familiar with the trade. So far, the so-called “traditional bonhitos” and “macro hitos” have been far smaller in issue size, topping out at around $10m-$15m equivalent. But the structure, typically rated AAA locally, is about to get tested on a broader scale as Su Casita prepares its debut. “Sofoles will find it difficult to issue [borhis] for at least a couple of years,” says Mark Zaltzman, CFO at Hipotecaria Vertice, and a former finance official at Su Casita. He says that until then, the macro-hito model is the only option to issue mortgage-backed paper. Vertice is considering such an issue for itself in the near future, says Zaltzman. Hitos offer investors increased collateral and better safeguards against default than typical borhis, according to an executive at HiTo, local bankers and rating agency analysts. The macro hito, being considered by sofoles, requires a high level of collateral in the form of cash. In the case of one recent deal issued by HiTo itself, cash equal to 27% of the total value of the deal is kept in escrow and invested in AAA government bonds. HiTo uses rating agency analysis, SHF standards and its own methodology to try and reach 99% probability of repayment on the mortgage credits being securitized, says Isaac Lopez, HiTo’s treasurer. The individuals owning the mortgages have the option of making interest payments on the notes with cash, or by purchasing the securitized instruments back from holders.

Mexico’s Infonavit has sold MXP1.5bn in 2031 UDI-denominated RMBS at par to yield 5.62%. The sale was the mortgage lender’s third transaction this year, following the same UDI-denominated single-tranche structure that has allowed it to sell a total of MXP6.1bn this year. The bonds have an average life of 4.6 years, and are rated AAA on a national scale. Banamex and Deutsche Bank managed the transaction. Fellow government-backed lender Fovissste is expected to roll out a MXP4bn RMBS offer in the first week of September. The 2 institutions had been the only Mexican RMBS issuers this year in the market, before Bancomer’s MXP5.9bn offer in the first week of August.

Titularizadora Colombiana is preparing to sell COP400m in RMBS, with a sale set for September 26, according to company officials. The lender will auction COP120bn-COP150bn in fixed rate 2019s, and later sell up to COP170bn more through an underwritten sale process. Also to be sold via underwriting are 2024 senor and subordinated fixed-rate bonds, which bring the total of the offer to COP400bn. Proceeds from the sale, rated AAA on a national scale, will strengthen Titularizadora’s lending capability. The notes are backed by mortgages originated by BBVA, Davivienda and Bancolombia. Titularizadora is structuring and managing the issue itself as a placement via several local brokerages.