Fovissste Local Bond Comes Tight

Mexico’s Fovissste raised MXP3.6bn ($309m) equivalent in the local markets Tuesday through a UDI-denominated RMBS that generated some MXP10bn plus in demand, says a banker on the deal. The bonds priced to yield 4.70%, or 339bp over Udibonos, tight to 4.85% area guidance, allowing it to come 5bp inside Infonavit’s RMBS issuance last week, adds the banker. Investors included pension funds, insurance companies, private banks, bank treasuries and mutual funds. “This is a government housing agency, so in a similar way to Infonavit’s issuance last week, it was very popular,” says one investor. Stronger demand for the Fovissste bond was seen as a sign that market conditions are improving for local borrowers. “The names are basically the same, so the tighter pricing is not due to a difference in the institutions as mortgage lenders,” adds the investor. Proceeds from the 2040 bonds will be used to originate mortgages. Bank of America, Banorte, and BBVA Bancomer were bookrunners on the deal, the government lender’s first of 2011. The bonds are rated AAA on a national scale.