Mexican housing agency Infonavit is understood to be on the verge of registering an MBS transaction put together by UBS Warburg and BBVA Bancomer, with Deutsche Bank Securities as co-lead, according to sources. The deal is heard at Ps1 billion (US$90 million), a drop from the figures bandied about when talk of this RMBS broke out in June of last year. "This is a pilot deal for them and they've decided to ease into it," said a source close to the deal.
The pared-down size and slow progression of the Infonavit transaction reflects the RMBS class in Mexico overall, where hyped-up talk in the beginning of the year gave way to more moderate chatter by the fourth quarter. The class did not debut until December when Credit Suisse First Boston closed a US$53 million-equivalent joint deal for originators Su Casita and GMAC Hipotecaria (see ASR 12/8, p.1)
While low-income borrowers are the target audience, Infonavit loans still have an advantage over those provided by private sector mortgage lenders known as Sofoles - such as Su Casita and GMAC - because payments to the agency are automatically deducted from a client's paycheck.
Also setting Infonavit apart from the Sofoles: its RMBS will likely be denominated in fixed-rate pesos, mirroring the collateral. Since Sofoles lend mostly in inflation-indexed units (UDIs), their deals will probably remain UDI-denominated, at least until the larger among them have generated sufficient fixed-rate loans to back a transaction.
Mijares, Angoitia, Cortes & Fuentes is heard to be legal counsel for the entire Infonavit transaction, while Thacher Proffitt & Wood is understood to be advising UBS.
Meanwhile, Metrofinanciera, one of the largest Sofoles, is also moving cautiously forward on a deal that will be one of the first transactions from the Mexican housing market sold to U.S. investors. Led by Dresdner Kleinwort Wasserstein, this is a securitization of bridge loans for construction, a seasoned asset in the domestic market. Metrofinanciera itself has placed bridge loan-backed deals with Mexican investors. Expected out this year, the transaction has been slowed by a host of questions particular to a deal that must satisfy different jurisdictions. In addition, the deal is denominated in dollars while the collateral is in Mexican currency. "It's taken more time than we thought, but it'll be out this year," said a source close to the deal.
Elsewhere in the market, the state of Sinaloa closed a Ps830 million (US$75 million) deal backed by federal co-participation revenue at a real rate of 5.35%. "We were going for a more dispersed investor base with this one," said Patricia Flores, deputy head of corporate finance at IXE Casa de Bolsa, which placed the deal. To that end, the brokerage sold roughly 10% to retail investors. The remaining bulk went to the usual suspects of pension funds and other institutional buysiders. Rated AA+' on the national scale by Fitch Ratings and Standard & Poor's, the transaction priced 136 basis points over the government's 10-year UDI-bonos. The issuer is using the proceeds to refinance debt with rates as high as 690 basis points of UDI-bonos (for further information, see ASR 1/19/04, p. 20).
This week, IXE is launching its roadshow for Fincasa, a small Sofol eyeing the market for Ps500 million (US$45 million). Pricing is scheduled for the second or third week of February. Bridge loans for construction are the underlying assets.
Elsewhere in the peso market, Value Casa de Bolsa is aiming for the first half of February to price a deal for Dinero Express, a unit of consumer giant Elektra. The collateral is comprised of commissions on electronic money transfers (see ASR 1/5/04, p. 1). Fitch released its rating on the deal last week, which was AA+(mex)' as anticipated. S&P has yet to make its rating public. According to sources, Value has the mandate for a property lease transaction for Valle Oriente, a shopping center in the northeastern city of Monterrey. Sized at Ps450 million (US$41 million), that deal is aiming for AA(mex)' from Fitch. Its maturity is 10 years. Thompson & Knight is understood to be legal counsel.
Meanwhile, Santander is shooting for the first week of February to place a Ps620 million (US$56 million) deal for Grupo GICSA. The underlying assets are property leases originated by three shopping centers owned by GICSA. While two of the malls have been operating for about two-and-a-half years, a third, Centro Comercial Forum, only recently opened in Culiacan, the capital of Sinaloa. A source close to the deal said that well-established anchor stores - including Spain's Zara - should allay concern of Forum's untested performance. S&P has rated the transaction AA+' on the national scale (see ASR 11/24/03, p. 17).
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