Mexico's second RMBS closed last week. Government agency Infonavit priced a Ps750.5 million (US$85 million) fixed-rate peso deal at 9.15% (for details on structure, see ASR 2/9, p.23). The spread over the government's seven-year treasuries was 88 basis points, reinforcing the trend of converging rates for straight and structured paper of the same ratings category. All three international rating agencies rated the Infonavit deal at triple-A on the national scale. UBS Warburg and BBVA Bancomer brought the deal to market, while relative unknown Biscayne Bay Group was the structurer, according to sources. The maximum legal final maturity is 12 years; the minimum is seven years.

Elsewhere in Mexico's domestic market, state credit agency Fonacot is returning to the market following its debut last Sept. 30. Led by Scotia Inverlat, the upcoming transaction differs from the first one in that collateral will be comprised of a revolving pool of consumer loans instead of a static one. Due to this change, the maturity will reach 20 months, eight months longer than the prior transaction. The deal will amount to Ps1 billion (US$91 million) of a total program of Ps3 billion (US$273 million). Pricing is slated for the end of March, said a source familiar with the deal. Fitch Ratings and Standard & Poor's rated the initial deal AAA' on the national scale; the issuer is shooting for that rating again, sources said.

Also in the works are construction loan-backed deals from Metrofinanciera and Su Casita. Both have tapped this asset before. This time around Su Casita has handed a joint mandate to Deutsche Bank and ING Barings instead of working solely with Deutsche as in the past. Concern of market saturation of housing deals was the impetus for bringing ING on board, said a source familiar with Su Casita. While the housing sector is more Deutsche's terrain, ING is at the top of the league tables for domestic bond deals in general.

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