Washington DC, May 19, 2004 – The International
Finance Corporation, the private sector arm of the World Bank Group, today
signed an agreement to provide a secured financing of 180 million Mexican
pesos ($16 million equivalent) to Hipotecaria Su Casita S.A. de C.V., a
leading Mexican mortgage company. The loan will be used to fund peso-denominated
premortgage bridge loans to Mexican developers for the construction of
low-income housing. The housing will be sold under programs sponsored
by Mexican public sector entities.
Peter Woicke, IFC’s executive vice president, said, “Although IFC
has an extended history supporting housing finance, this is our first project
financing housing construction. It addresses the supply side, rather
than demand-related issues associated with providing liquidity for mortgage
lending to home buyers. The project represents an important step in expanding
IFC’s support for the housing finance value chain.” Mr. Woicke added,
“This project is expected to stimulate IFC’s lending for residential
construction where similar financing can be implemented.”
Manuel Campos Spoor, Su Casita’s vice president, noted, “Mexico
faces a large housing deficit, estimated at around 4 million units. One
key to reducing this deficit is the availability of financing for construction.
The federal housing agency has changed its policy and now focuses on granting
guarantees as opposed to funding construction loans. Hence firms like ours
have had to diversify their sources of funding. The IFC investment addresses
Su Casita is the second largest Sofol—a Sociedad Financiera de Objecto
Limitado, or specialized non-bank mortgage company—in Mexico. Established
in 1994, the company’s primary business is origination and servicing of
residential mortgages and construction loans. Su Casita has offices
throughout Mexico and has recently begun operating in the United States.
Su Casita’s construction loans to housing developers provide a platform
for its mortgage loan business. As of March 2004, Su Casita’s assets
and capital stood at about $1.7 billion and $107 million equivalent, respectively.
This investment is part of IFC’s strategic relationship with Su Casita.
IFC initially made an equity investment and provided funding for
the company’s first pilot mortgage bond issue. In this new investment,
IFC will assist Su Casita in sustaining its construction bridge loan program.
IFC has also facilitated a relationship between Su Casita and DEG,
the German development financier, which will provide funding to of up to
12 million Euros equivalent along the lines of IFC’s investment.
IFC's mission (www.ifc.org)
is to promote sustainable private sector investment in developing countries,
helping to reduce poverty and improve people's lives. IFC finances private
sector investments in the developing world, mobilizes capital in the international
financial markets, helps clients improve social and environmental sustainability,
and provides technical assistance and advice to governments and businesses.
From its founding in 1956 through FY03, IFC has committed more than
$37 billion of its own funds and arranged $22 billion in syndications for
2,990 companies in 140 developing countries. IFC's worldwide committed
portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion
held for participants in loan syndications.