IDB Signs Guarantee Facility with Su Casita

The Inter-American Development Bank (IDB) has signed a three-year guarantee facility with Mexican sofol Hipotecaria Su Casita to help it expand its access to local capital markets on more favorable terms, reduce its reliance on public funding sources and increase its mortgage origination. The agreement makes available up to $75 million in partial credit guarantees to support the issuance of up to $500 million in residential mortgage-backed securities (RMBS) by Su Casita. The specialized mortgage company expects to double the size of its mortgage portfolio to around $4 billion equivalent by 2010. This is the first time the IDB has used a guarantee facility to support a medium-term RBMS program, allowing the issuer to allocate IDB guarantee authority where it considers it most beneficial. “We expect to replicate this programmatic approach in Mexico, as well as other markets in the region,” commented Hans Schulz, head of financial markets at the IDB’s private sector department.