Just a few weeks into the New Year Mexico's securitization market is crackling with energy. Having snagged the mandate to structure the country's first MBS, Deutsche Bank is crafting a program sized at Ps5 billion (US$466 million). The market initially projected a mega-trust of up to Ps10 billion (US$932 million), but ambition had to bow before the gargantuan task ahead. Among the obstacles, sources say, is the fact that mortgages are subject to the laws of the state where they were originated. Simplifying this byzantine picture will certainly be a challenge and Deutsche is aiming to sop up collateral from a broad geographic base. It expects to initiate the program with a Ps1.5 billion (US$140 million) issue in the second quarter. If all goes well, the bank will close the program by year-end. Deutsche has paired with IXE Casa de Bolsa to place the deal.
IXE is busy on other fronts as well. In the first quarter, it plans to issue a Ps500 million (US$47 million) seven-year deal for housing lender Credito y Casa, backed by bridge loans for construction. The deal has a overcollateralization of 5.78%, along with a 6.32% guarantee from government agency SHF and a 7.2% guarantee from Dutch development bank FMO, according to a source on the transaction. Moody's Investors Service and Standard & Poor's are expected to rate the deal triple-A on the national scale. The bond resembles those already placed by housing finance companies known as SOFOLes (10/14/02, p.1). Another SOFOL, Metrofinanciera, is slated to place the final Ps500 million (US$47 million) of an IXE-led Ps1 billion (US$93 million) program during Q1 as well (For pricing see ASR 1/20/03, p.23). Finally, IXE is preparing a Ps300m (US$28 million) deal for housing construction company Frisa, backed by future lending for purchasers by state agencies FOVI and Infonavit. All three IXE deals have Romo, Pailles, & Guzman as legal counsel.
Another deal in the works is for the state of Guerrero, backed by federal participation revenues. Timed for the first half of February, Interacciones is both structurer and issuer on the 12-year deal, sized at Ps1.5 billion (US$140 million). All three international agencies have rated the transaction double-A plus on the national scale, according to a source on the deal. The structure will trap all federal revenues earmarked for Guerrero, except those allocations meant for the state's municipalities. Another enhancement is a liquidity reserve equal to a single quarterly payment. Guerrero had a total direct debt of Ps1.1 billion (US$102 million) at Dec. 31, 2002. Its best-known city is the lively resort of Acapulco. Valencia de Toro Abogados is legal counsel for the underwriter.
