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| Deal Profiles |
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Mexican Residential Mortgage-Backed Securitization
Class A Hipotecaria Su Casita Mortgage 2007-1
$232,500,000
 MBIA’s Triple-A wrap of USD$ 232,500,000 for Hipotecaria Su Casita (HSC) is the first dollar denominated cross-border Residential Mortgage-Backed Securitization (RMBS) transaction involving Mexican assets. HSC is Mexico’s largest independently owned specialized housing finance company, known in the country as a Sofol. It is also a market leader, exhibiting strong operational capability, diversified shareholder ownership, and experienced and innovative management. MBIA has been active in the domestic Mexican capital markets over the last four years--especially in infrastructure projects-- and is pleased to be the first monoline to secure a cross-border RMBS by a Sofol. MBIA’s wrap ensured seamless and cost-effective market execution for this important financing.
Several factors have favorably influenced MBIA’s involvement in the Mexican capital markets generally, and in this latest transaction with HSC. Over the past decade, Mexico has exhibited real macro-economic and political stability: GDP has grown at a consistent 3-4 percent rate during the period and inflation has been moderate. Despite a contentious presidential election last year, the new conservative administration has maintained many of the economic and political directions of the prior administration of President Vicente Fox. The housing sector was one of the most prominent successes of the Fox administration and remains a top priority. There is a substantial housing supply shortage in the country despite the rapid pace of residential home development over the last six years. In addition, the demographic profile of Mexico is young with a median age of 24, suggesting increased levels of household formation in the medium-term future.
The Sofol sector was created by
the government following the 1994-95
Peso Crisis to increase the availability
of mortgage capital to a broad
spectrum of the Mexican population.
Sofols still play an important
role in the public policy goal
of expanding home ownership. A
government entity, Sociedad Hipotecaria
Federal (SHF) and its predecessor
organization FOVI, have historically
been the primary sources of funding
for the Sofols. However, from
its inception, SHF has sought
to be a catalyst for private capital
in the mortgage sector and to
gradually diminish its role as
a source of funding. Development
of a secondary mortgage market
involving securitization technology
represents one of the most effective
means by which Sofols can replace
SHF funding. The government’s
need to ensure successful market
development lends a high degree
of importance for this HSC and
other Sofol financings that is
not present with respect to the
typical US structured finance
transaction.
HSC was founded in 1994 as the
first mortgage Sofol in Mexico.
The firm is focused on the entry-level
and middle income segments of
the residential mortgage market.
HSC also provides construction
loans to residential developers
and the current mix of assets
on balance sheet is approximately
81% individual mortgages and 19%
loans. The subject transaction
contains only fully amortizing
residential mortgage loans. As
of January 2006, HSC is the leading
independent Sofol lender in the
residential mortgage segment.
For this wrapped transaction, the mortgage loans will consist of first-lien, fixed-rate, owner-occupied loans made by HSC to borrowers in the mid-to-lower range of Mexican household incomes.
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Copyright ©2007 MBIA INC. |
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