WASHINGTON, D.C., February 22, 2001--
BACS Banco de Crédito y Securitización S.A., a financial entity sponsored
by the International Finance Corporation to create and develop a secondary
mortgage market in Argentina, announced that it has sold US$115.8 million
issue of Mortgage Bonds, Series 2001-1, issued by First Trust New York,
Argentine permanent representation, on behalf of BACS I Mortgage Trust.
BACS, formed in September 2000 by IFC, Banco Hipotecario (BH) and IRSA
Inversiones y Representaciones SA, is fulfilling a significant developmental
role by providing liquidity to the local banking system, and by lowering
the cost of borrowing, thereby increasing the affordability of mortgages.
BACS is designed to have the management and resources to always provide
an open purchasing window for all qualified mortgages from all qualified
The bonds placed yesterday are backed by U.S. dollar-denominated mortgage
loans and are secured by residential properties located in Argentina. Senior
Mortgage Bonds of $95 million were placed by Bear Stearns with U.S. and
international investors and Junior Mortgage Bonds of $20.8 million were
placed locally in Argentina by BACS.
The Class AF Bonds, a senior fixed rate tranche, was offered with a coupon
of 8 percent per annum at a discount to yield 8.99 percent. The Class
AV Bonds, a senior floating rate tranche, were priced at par to yield 250
basis points more than the London interbank offered rate.
The mortgage loans have an average remaining term to maturity of 10 years,
an average rate of 11.12 percent and an average loan-to-value ratio at
origination of 59.3 percent. Banco Hipotecario will serve as master
service for the mortgage loans.
An important feature of the deal is that the structure of the transaction
and the investment grade ratings assigned permitted the Senior Mortgage
Bonds, at their original launch, to price close to 290 basis points through
the Argentine Sovereign Curve. It also has to be noted that the amount
of the transaction was upsized from an original launch level of $75 million
to the final issuance amount of $95 million in response to strong interest
from U.S. and international investors. Bear, Stearns & Co. Inc.,
served as the sole placement agent for the Senior Mortgage Bonds pursuant
to a Rule 144A/Regulation S private placement.
The mission of IFC, part of the World Bank Group, is to promote sustainable
private sector investment in developing countries as a way to reduce poverty
and improve people’s lives. IFC finances private sector investments
in the developing world, mobilizes capital in the international financial
markets, and provides technical assistance and advice to governments and