Washington, D.C. / Mexico City, September
8, 2006—The International Finance Corporation, the private sector
arm of the World Bank Group, has signed an agreement to provide a 780 million
peso ($70 million equivalent) revolving line of credit to Hipotecaria Su
Casita, S.A. de C.V., a specialized housing finance institution that targets
low- and middle-income people in Mexico.
This loan is part of a 2,670 million peso ($240 million equivalent) funding
package to Su Casita over three years, which provides credit enhancements
for securitizations and corporate loans for new products targeted at low-income
customers, as well as revolving credit lines.
IFC’s financing will help Su Casita reduce its reliance on Sociedad Hipotecaria
Federal, the government’s development bank, which will cease new funding
operations in 2009. The financing will also support Su Casita’s
Su Casita is increasing its presence in the often overlooked low-income
segment of Mexico’s housing market, where it plans to expand its business
with customized products for the target segments. With this facility,
IFC will support this expansion.
IFC has implemented a long-term, relationship-based approach to addressing
Su Casita’s business needs. This approach will be used by IFC to
support high-impact projects through strategic partnerships with local
financial institutions and to design comprehensive multiyear financing
Atul Mehta, IFC’s Director for Latin America and the Caribbean, noted,
“Our partnership with Su Casita is being strengthened through this innovative
means to address the company’s need for strategic expansion. This
financing fits well with IFC’s commitment to developing a broad-based
housing finance market, an important building block for Mexico’s financial
IFC’s investment underlines its strategy to broaden the housing sector
in Mexico by providing funding to key players and contributing to the development
of the country’s capital markets. Since 1998, IFC has provided debt
funding and equity capital to Mexico’s specialized financial intermediaries.
Jyrki Koskelo, IFC’s Director of Global Financial Markets, said, “IFC’s
financing will support Su Casita’s efforts to diversify its funding base
for primary mortgage market activities, which will put housing finance
in reach of low- and middle-income people who otherwise could not afford
to buy a home.”
Mark David Zaltzman, Chief Financial Officer of Su Casita, said, “We are
pleased to be working with IFC to develop the housing sector in Mexico.
IFC’s financing is a vote of confidence in our operations, and we
look forward to maintaining this strong partnership in the future.”
IFC’s Strategy in Mexico’s Housing Sector
Recognizing the need for local currency financing so that companies can
match the currency of borrowings to their revenues, IFC has committed the
equivalent of approximately $290 million in peso-denominated loans and
other financing to Mexican housing companies to date. IFC’s investments
in the lower-income housing sector will finance about 31,000 residential
units per year, with the greatest development reach in the low-income segments.
IFC’s credit enhancement facilities are expected to mobilize close
to $880 million.
IFC’s strategy in Mexico’s housing sector has adopted a phased approach,
in collaboration with Sociedad Hipotecaria Federal. The first phase focused
on helping develop a vibrant primary mortgage market through local currency
debt facilities to major originators in the sector. Now, in the second
phase, IFC is helping develop the secondary mortgage market by providing
warehouse credit lines to support mortgage securitization programs and
credit enhancement facilities for residential mortgage-backed securities
and other capital market securities.
IFC in Mexico:
Since 1956, IFC has invested $5.6 billion, including $2.2 billion in syndications,
in Mexico, in sectors ranging from infrastructure and manufacturing to
agribusiness and the financial sector, making the country the third-largest
recipient of IFC financing in dollar value, after Brazil and Argentina.
IFC committed $279.8 million in FY05 as new financing in Mexico, and it
held a total portfolio of $1.6 billion, including syndications, as of May
IFC's strategy for Mexico focuses on enhancing the international competitiveness
of the country’s private sector, especially by further deepening the financial
sector; promoting investments where the private sector can play a larger
role; and promoting sustainable social and environmental development and
good corporate governance.
The International Finance Corporation is the private sector arm of the
World Bank Group and is headquartered in Washington, D.C. IFC coordinates
its activities with the other institutions of the World Bank Group, but
is legally and financially independent. Its 178 member countries provide
its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment
in developing and transition 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 FY05, IFC has committed more than $49 billion of its own
funds and arranged $24 billion in syndications for 3,319 companies in 140
developing countries. IFC’s worldwide committed portfolio as of
FY05 was $19.3 billion for its own account and $5.3 billion held for participants
in loan syndications. For more information, visit www.ifc.org.