Mexican housing finance company Metrofinanciera is one step closer to tapping U.S. investors in an inaugural deal. Sized at $100 million, the transaction is being touted as the first cross-border securitization of Mexican real estate receivables. The sticky point in the structure - a cross-currency and interest rate swap - appears to have been resolved, with Dresdner Switzerland coming on as the provider. The swap is needed to mitigate the mismatch between the collateral cash flow and the payments on the notes. The swap will also double as political risk insurance, extending protection against the non-transferability and inconvertibility that can arise when a country imposes capital controls on global financial flows, according to a report by Moody's Investors Service. Lead by Dresdner Kleinwort Wasserstein, the transaction is in pre-road show phase, said a source close to the deal.

Moody's and Fitch Ratings have rated the transaction Baa1' and BBB', respectively. Apart from the swap, the transaction has a 14.20% partial credit guaranty from Mexican state agency Sociedad Hipotecaria Federal, the first time this entity has enhanced a cross-border deal.

Collateral for the Metrofinanciera transaction is comprised of bridge loans for construction.

On the Mexican domestic front, housing finance company Su Casita issued a Ps626 million ($55 million) deal backed by construction loans on Sept. 23. A Ps550 million senior piece priced to yield 115 basis points over the benchmark 28-day TIIE rate. A Ps76 million subordinated chunk yielded a spread of 350 basis points. S&P and Fitch rated the senior piece triple-A on the national scale and the subordinated notes single-A.

Led by ING Barings, the Su Casita deal is similar to senior/sub structures issued by peer company Hipotecaria Nacional. The deal is unusual for ING, which had shied away from the real estate sector, while global rivals Deutsche Bank, Santander, BBVA Bancomer, and Credit Suisse First Boston jockeyed for position in this fast-growing asset class.

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