Mexican domestic securitizations are returning, albeit slowly. With a Ps400 million (US$35 million) bond, housing developer Casas Beta shattered the issuance paralysis that had gripped the market for all of the second quarter. Placed July 8, the five-year deal priced at 270 basis points over the one-month TIIE benchmark via local brokerage IXE. Collateral is comprised of bridge loans for construction and land earmarked for housing projects (see ASR 6/7, p.22).
Interest rates that shot up in April have begun to steady and investors are less reticent to take on market risk. "They really have no choice, because their liquidity is becoming unmanageable," said one Mexico City-based banker, referring to the violent diversion last quarter in pension fund money toward virtually risk-free product such as time deposits and short-term peso treasuries.