IDB Offers Mexico Housing Boost

The IDB has agreed provide $2.8bn in financing through three facilities to boost liquidity in the Mexican mortgage and housing sector, it says. It will provide a 10-year $2.5bn sovereign-guaranteed credit line to Sociedad Hipoteca Federal, the first disbursement of which will be a $500m 25-year loan paying a spread over Libor. In a separate, part of the package, the IDB will offer up to $150m equivalent in pesos to eligible Mexican mortgage lenders, following a similar $150m facility brought by the IFC in October. Through the facility, the IDB can provide mezzanine credit support via partial credit guarantees or purchases of mezzanine notes by way of a loan to a trust. It is also able to finance the purchase of up to 15% in RMBS though a loan to a trust, and provide an unsecured loan to a fund providing supporting lenders. Finally, the IDB will make available a $185m loan facility to state-backed lender Infonavit, to support mezzanine portions of its RMBS issuance. Both the $150m and $180m non-sovereign guaranteed loan facilities are available for 3 years, renewable for another 3.