The first residential mortgage-backed securities (RMBS) to be issued by HSBC Mexico have been assigned a national scale rating of MXAAA/MXA by Standard & Poor’s. According to the ratings agency, the issue is the largest such in the region to date. The two series of RMBS, or Borhis to use their Mexican acronym, total $225 million (2.5 billion pesos) and carry a maturity date of November 22, 2022.
Category: Structured Finance
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FMO and IDB Launch Local Currency Fund for Micro Institutions
FMO, the international development bank of the Netherlands, together with the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB) have signed for a local-currency fund (Locfund) to offer financing to micro and small businesses in Central America and the Caribbean. FMO will finance the new facility through its MASSIF fund, which provides venture capital and loans in local currency to banks in developing countries, so that the can serve local micro and small businesses and consumers more effectively.
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CAF Wraps Up VEB450 Billion Program
CAF has wrapped up a VEB450 billion ($210 million) bond program through Citigroup, with a VEB128 billion issue of 12-year notes. The deal was the third in a series which started in June 2006.
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Deutsche Bank To Bring First Mexican CDO
Deutsche Bank is to come with the first CDO seen in the Mexican market. The pass-through transaction is a repackaging of the senior tranches of five Mexican RMBS securitizations (Borhis). Ratings agency Fitch has assigned AAA(mx) ratings to the three series of debt. The series include Class A-1 and A-2 which pay fixed interest monthly and ultimate principal. The Class A-IO is an interest-only tranche, and is only expected to receive cash flow to the extent excess interest is available, said Fitch. Collateral to repay the notes comes from the five RMBS tranches.
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IDB Raises $30 Million In Colombian Pesos
The IDB issued COP65 billion ($30 million) in 10-year bullet bonds Tuesday. The inflation-linked notes priced 20 basis points through TES. Fees for Santander, the sole-lead, were 40 basis points. The transaction will settle on March 29.
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Regional Remittances Set to Soar More Than 60%
Remittances to the LatAm and Caribbean region are set to exceed $100 billion by 2010, from $62.3 billion in 2006 and $53.6 billion in 2005, according to Donald Terry, manager of the IDB’s Multilateral Investment Fund (MIF). The 2006 number was bigger than all FDI and foreign aid combined and makes LatAm the biggest region in the world for remittances, according to the MIF. The increase is driven largely by a lack of jobs in the region and demographics. Last year’s total includes $7.4 billion to Brazil, $4.2 billion to Colombia and $23.0 billion to Mexico. Around 75% comes from the US, while an increasing amount is flowing from Europe. Better technology and competition is cutting processing fees, which have dropped to around 4%-5%, says Terry. Local banks active in the region have yet to find a way to capture most of this money. Remittances are typically distributed at some point through a bank, coop, credit union or microfinance institution. Few actually become deposits. A big stumbling block, say bankers, is that many of the remitters are working illegally and do not want to open accounts. Until this workforce comes to the formal economy, the opportunity will be lost.
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IDB Approves $100 Million For BBVA Banco Continental
The Inter-American Development Bank has approved a $100 million credit guarantee facility for BBVA Banco Continental of Peru to enhance residential mortgage backed securities (RMBS). The guarantee facility will support the first securitization of a mortgage portfolio in Peru, thus introducing a new source of funding for originators and a new financial instrument for investors, according to the Bank. BBVA Banco Continental is Peru’s second-largest commercial bank in terms of assets and deposits.
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IDB Names Hurtado
The Inter-American Development Bank (IDB) has named Carlos Hurtado, former deputy finance minister of Mexico, as the new vice-president of finance and administration at the Bank. Last month, Hurtado was rejected as a new Central Bank board member after being nominated by President Felipe Calderón. According to the IDB, Hurtado will have responsibility for several departments, including budget, administration and corporate acquisitions, finance, human resources, technology and information and legal advice.
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Su Casita Preps $300 Million Cross-Border RMBS
Mexican mortgage company Su Casita is preparing to launch a cross-border RMBS next week to raise around $300 million, its CFO Mark Zaltzman told LatinFinance. If completed, the offering would be the first cross-border RMBS to come out of Mexico, according to S&P. The company will look to price the 144a offering by the end of the month. The deal is Su Casita’s second visit to the capital markets this year. It sold $78 million in peso-denominated CEBURS (certificados bursátiles ficuciarios) in January. Both financings are part of a $1 billion issuance program for 2007 whose proceeds are destined to repay debt the company has with its parent SHS, and for new mortgages. Credit Suisse is the structurer and placement agent.
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GMAC Launches $90 Million Mexican Peso MBS
GMAC launched late Tuesday a 90 million Mexican peso MBS offering to be priced at the end of March. The notes, to be wrapped by FGIC, a US-based insurer, will have a tenor of 28 years and an average life of 8-10 years. Pricing will be based on the comparable UDI bond. The deal is analogous to GMAC’s first FGIC-wrapped offering which was priced last year. Credit Suisse has sole books on the deal.