NEW YORK - Moody's Investors Service played host to one of Latin America's burgeoning stars, Mexico's real estate market, at its sixth annual Latin American Securitization Briefing,' held here Sept. 23. Discussions of deals backed by construction bridge loans and mortgages filled the stately Union League Club drawing rooms as originators explained to current and would-be suitors why foreign money is what they're after.
"The domestic market is not big enough for government and corporate requirements," said Armando Guzman, CEO of Mexican housing finance provider Metrofinanciera. Bonds from private entities average roughly 24% of the portfolios held by Mexican pension funds, mutual funds, and insurance companies. The overall and relative growth of investments in non-government securities isn't expected to be fast enough to meet the voracious funding demand among Sofols, as private housing finance companies in Mexico are known. What's more, the Sociedad Hipotecaria Federal, a state entity that historically bankrolled the sector, has a 2009 deadline to phase out direct funding. "This is why we have approached the cross-border market," Guzman said.