Things aren't going so well for domestic structured deals in Mexico, as recent market lurches have yet to fade. "Though things have calmed down, it's still worse than in the beginning of the year," said a source on one of the two deals backed by bridge loans for construction that priced over the last couple of weeks.

Deutsche Bank Securities priced the senior piece of the Ps672-million Su Casita deal at 135 basis points over six-month Cetes treasuries. Rated triple-A by all three major agencies, the senior tranche amounted to Ps600 million pesos. About 58% of the deal went to local pension funds, known as Afores. Mutual funds snapped up another 40% and insurance companies took 2% (see ASR 10/21, p.21).

Local brokerage IXE Casa de Bolsa priced a similar deal with bridge loans originated by special purpose finance company Metro Financiera. That deal was comprised of a single tranche worth Ps500 million and yielded 145bp over 6-month Cetes. It also enjoys a triple-A rating (see ASR 9/23 p.20).

Unofficial price talk for both deals was closer to 100 basis points.

Metrofinanciera in particular may have repercussions for the housing market, since the deal was touted as the first to carry a guarantee from the Sociedad Hipotecaria Financiera. That government agency is hoping to be the catalyst for the first true MBS paper in Mexico. If investors aren't yet convinced that an SHF guarantee has value, the road to MBS may be bumpier than anticipated.

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