The sleeping giant of Mexico's securitization market is awakening. Once confined basically to bridge loans for construction, the housing sector could turn out the country's first true MBS by 1Q02. Now in the works is a master trust combining mortgages from several SOFOLes (Sociedades Financieras de Objeto Limitado), special purpose financial companies that provide housing funds to construction companies and to low-income individuals. The trust could hit Ps10 billion (US$978.9 million), with multiple issues the most likely scenario.

"We might see the structure emerge by the end of the year," said Juan Pablo de Mollein, associate director at Standard & Poor's Structured Finance Group in Buenos Aires. Total MBS issuance for 2003 could hit Ps13 billion (US$1.27 billion), particularly if the market gets started early on.

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