Fovissste Lands Mega RMBS

Mexican mortgage lender Fovissste has sold MXP3.5bn in 2039 UDI-denominated RMBS, its first ever use of the structure. In a single tranche, the government-backed lender priced the bonds at a fixed 5.31%, or UDIbonos plus 225bp. The AAA deal saw about 33% oversubscription, according to a banker managing the sale, and is the second Mexican RMBS issue of 2009, following fellow government lender Infonavit. “It’s a very simple structure, very straightforward,” says Reggie de Villiers, head of LatAm securitization for co-lead Bank of America-Merrill Lynch, describing the key to winning over investors. He highlights the single tranche structure and the fact that all cashflow goes back to paying the bond before anything returns to Fovissste as key components, in addition to Fovissste’s government-backed status. The issue, featuring a 3.8-year average life and 7-year expected maturity, is backed by a portfolio of 18,835 of mortgage loans originated by Fovissste, the nation’s second-largest home lender, after Infonavit. The issuer has filed for a MXP20bn shelf, and de Villiers notes that this should be the first of several issues over the next 12-18 months. Banorte, Ixe and BofA-Merrill managed the deal, with Goldman Sachs as structuring agent. Infonavit priced a MXP2bn RMBS May 21 at 5.65%, or UDIbonos plus 228bp, and is preparing another for early July.