Mexican housing finance company Fincasa Hipotecaria paid its first visit to the market Feb. 18, pricing a Ps500 million (US$46 million), five-year deal backed by bridge loans for construction. The yield came to 152 basis points over three-month Cetes or its interpolated equivalent. Fitch Ratings and Standard & Poor's rated the deal AAA(mex)' and mxAAA' on the national scale, respectively. Native investment bank IXE was sole lead.

The Fincasa transaction opens the door for other housing lenders of smallish stature to tap the markets on a stand-alone basis, though players predict more joint originator deals along the lines of a RMBS issued between GMAC Hipotecaria and Su Casita last December. Peer companies that have preceded Fincasa in issuance are for the most part several times larger.

As of Nov. 2003, Fincasa had assets of Ps2.7 billion (US$246 million), according to a trade group that brings together Sofols, as private housing finance companies in Mexico are known. In contrast, Credito y Casa had Ps12.7 billion (US$1.2 billion), Hipotecaria Nacional had Ps25.6 billion (US$2.3 billion), and Su Casita had Ps15.5 billion (US$1.4 billion). Overall, Sofols are growing quickly to meet voracious demand for housing. And issuance will only increase, according to most players, as state funding for their business slowly dries up.

Geo develops deal

In other housing news, developer Geo Corp. has begun the process of registering a Ps500 million (US$46 million) deal backed by accounts receivables. The prospectus on the Mexican Securities Exchange Web site indicates that Fitch and S&P have been tapped to rate the deal. Banorte is the sole lead and Bufete Rodriguez Marquez is providing legal counsel. Geo operates in 32 cities throughout Mexico. The company works closely with state agencies Sociedad Hipotecaria Federal and Infonavit (see below for upcoming Infonavit RMBS).

Meanwhile, more details have surfaced of a deal that local investment bank Value is leading for a shopping mall based in the vicinity of Monterrey, the bustling economic capital of the northeast state of Nuevo Leon. Valle de Colorines, which specializes in developing and managing shopping centers, has a Ps450 million (US$41 million) deal in the works. Collateral are rental contracts and other receivables linked to stores housed in the Plaza Fiesta San Augustin in San Pedro Garza Garcia. The contracts have terms between two and 15 years. Eight million people visited the San Augustin mall in 2002. Anchor stores include JC Penny, Sears, and Zara.

Infonavit roadshow winds up

Last week BBVA Bancomer and UBS wrapped up a roadshow for the domestic market's second RMBS, a deal for state agency Infonavit. "It seems to be that the market perception [of Infonavit] is very positive," said a source close to the deal. The leads have had their work cut out for them. Part of the marketing has been to re-invent an agency notorious not too long ago for rampant delinquencies. While neither bank has managed a deal in the housing asset market in Mexico, their relationship is said to be complementary, with BBVA having led other local securitizations and UBS leveraging its experience in the U.S. and beyond. Word is that they may work together again.

The deal was initially heard at Ps1 billion (US$91 million), but a report from Fitch sized it at Ps805 million (US$73 million). The underlying collateral is expected to be valued at around Ps982 million (US$90 million), giving the deal an enhancement of 18%. This overcollateralization should be maintained through the life of the deal, which is approximately 12 years. Fitch rated the transaction triple-A on the national scale; S&P is expected to do the same.

Moody's rates toll-road in image boost

Finally, in Mexico Moody's Investors Service came out with a rating on a transaction for toll-road Mexico-Toluca, sized at 1.46 billion inflation-indexed units (UDIs). Carrying a wrap from MBIA, the agency unsurprisingly gave the domestic deal a triple-A. What was surprising was the decision by originator Pacsa to hire Moody's now on a deal that closed Sept. 25 of last year (see ASR 10/06, p. 26). S&P and Fitch had already rated the transaction. The third rating apparently was not a nudge towards the cross-border market. "It was just a case of image," said a source close to the deal. BBVA Bancomer led the transaction.

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