Category: Structured Finance

The IFC is looking at investing in remittance-backed transactions, particularly in Central America. “One product that we’re looking at a lot is the diversified payment rights (DPRs),” Rogerio Pilotto, the IFC’s Sao Paulo business development officer for structured and sub national finance, tells LatinFinance. “We haven’t done any in Latin America recently, but we’re having some discussions and we think there are specific countries in which we would have a role,” he adds. According to Pilotto, a DPR deal will likely happen with the multilateral’s involvement this year. The IFC acts as an investor – similar to its role in A/B loans – taking a 10%-20% stake on a $100m+ deal in order to catalyze private investment. Tenors tend to be around 5 years. Pilotto says the IFC is not looking to do DPRs in Brazil, or other developed markets, but more likely Central America. Pilotto notes that the latter contains “countries with a good risk profile but no access.” The IFC has only recently started to look at the DPR structure. “Before the crisis we didn’t see any role, but now we think there’s a strong role,” says Pilotto.

Mexican mortgage lender Fovissste has sold MXP3.5bn in 2039 UDI-denominated RMBS, its first ever use of the structure. In a single tranche, the government-backed lender priced the bonds at a fixed 5.31%, or UDIbonos plus 225bp. The AAA deal saw about 33% oversubscription, according to a banker managing the sale, and is the second Mexican RMBS issue of 2009, following fellow government lender Infonavit. “It’s a very simple structure, very straightforward,” says Reggie de Villiers, head of LatAm securitization for co-lead Bank of America-Merrill Lynch, describing the key to winning over investors. He highlights the single tranche structure and the fact that all cashflow goes back to paying the bond before anything returns to Fovissste as key components, in addition to Fovissste’s government-backed status. The issue, featuring a 3.8-year average life and 7-year expected maturity, is backed by a portfolio of 18,835 of mortgage loans originated by Fovissste, the nation’s second-largest home lender, after Infonavit. The issuer has filed for a MXP20bn shelf, and de Villiers notes that this should be the first of several issues over the next 12-18 months. Banorte, Ixe and BofA-Merrill managed the deal, with Goldman Sachs as structuring agent. Infonavit priced a MXP2bn RMBS May 21 at 5.65%, or UDIbonos plus 228bp, and is preparing another for early July.

Amid a regional revival in securitization, Mexican mortgage lender Fovissste is planning to sell MXP3.5bn in 2039 UDI-denominated RMBS June 24, its first ever use of the structure, according to bankers managing it. The government-backed lender to federal employees is using a similar model to Infonavit’s MXP2bn May transaction to raise funds in what remains a very challenging market. A simple structure from the government-backed lender is the only way to get RMBS deals sold in Mexico, says a banker on the deal, who adds that this is likely to be the case through the end of the year. The 7-year average life issue is backed by a portfolio of 18,835 of mortgage loans originated by Fovissste, the nation’s second-largest home lender after Infonavit. The transaction, the first from a MXP20bn shelf, is rated AAA on a national scale. Banorte, Ixe and Merrill Lynch are managing the deal, with Goldman Sachs joining the trio as structuring agent. Infonavit priced its MXP2bn deal May 21 at 5.65%, or UDIbonos plus 228bp, and is preparing another for early July.