Metrofinanciera Shoring up Balance Sheet

Metrofinanciera, the Mexican housing lender, is seeking private sources of funds to shore up its balance sheet. “We are looking at ways of strengthening our capital base, talking to investors and global banks,” CEO Armando Guzman tells LatinFinance. Rating agencies and bond markets have fretted over Metrofinanciera’s ability to refinance recent rapid expansion. But Guzman says the firm is in good shape and rejects rumors that Metrofinanciera may be up for sale. The official says agencies were concerned about short term debt and a recently established land bank. But he claims that neither is problematic, and adds that company debt with a maturity of less than 12 months has been cut to MXP1.3bn from MXP7.6bn last year. “We think the land bank is a natural backwards vertical integration of the business,” says Guzman, adding that it has $500m invested in Mexican land. “We have enormous challenges to keep up our business strategy and growth strategy,” adds the official. Guzman says the company is seeing decent consumer loan opportunities, as well as a new credit card venture. Metrofinanciera last month suffered downgrades as agencies fretted over exposure to short-term maturities and rising costs of funds.