Su Casita Cosies up to Investors

Mexican borrowers are having to work much harder this year to woo investors, and frequent issuer Hipotecaria Su Casita is no exception. “Things have changed completely,” says Su Casita CFO Mark Zaltzman. “We’ve had to completely change our strategy.” By contrast to last year, when investors were not interested in meeting but still placed huge orders for the bonds, Su Casita now has to go and see every buysider and explain all details of a transaction. It is also doing a lot of non-deal roadshows and, like a high grade US entity, flagging for investors full details of the year’s issuance plan. Transparency and reporting has become crucial. “This has been an extremely slow year,” says Zaltzman. The official adds that by this point in the year, when Su Casita has only done one RMBS, it should have done 2-3 transactions. Su Casita started issuing in 2002 and was last year’s second biggest Mexican corporate borrower, according to Zaltzman. “This is now a buyer’s market and we cater to that fact,” he adds. Su Casita did a European roadshow in November to assess demand for covered bonds. It sees value in the structure, which has no prepayment risk and brings diversification of the investor base. But Zaltzman notes limitations on the liquidity side, since the buyer base typically wants EUR500m or more. Su Casita is not expected to issue in this format.