Washington, D.C./ Mexico City June
28, 2005 — The International Finance Corporation, the private sector
arm of the World Bank Group, has signed an agreement to provide a 553 million
peso-denominated revolving line of credit (equivalent to $50 million) to
Hipotecaria Su Casita, S.A. de C.V., a specialized financial intermediary
in Mexico. IFC’s financing will help Su Casita fund low- to middle-income
mortgage loans, diversify its funding sources, and maintain its ongoing
securitization program in the domestic capital markets.
IFC’s investment underlines its strategy to develop the housing sector
in Mexico by providing funding to key players and to contribute to the
development of the country’s capital markets.
Recognizing the need for local currency financing so that companies can
match the currency of borrowings to their revenues, to date IFC has committed
the equivalent of $300 million in peso-denominated loans and other financing
to Mexican housing companies.
Su Casita is Mexico’s second-largest specialized mortgage lending institution,
or sofol, based on market share of loans. Its main function
is to extend mortgage loans to lower-income individuals under the auspices
of Mexico's federal housing finance institution, Sociedad Hipotecaria Federal
(SHF) financing programs, as well as to provide construction financing
to developers of low-income housing.
Jyrki Koskelo, Director of IFC’s Global Financial Markets Department,
said, “This financing will support Su Casita’s continuing efforts to
diversify its funding base for primary mortgage market activities, but
more specifically, help it to increase access for housing finance
for both low and middle income market segments, and thus strengthen its
strategic focus to reach previously underserved sectors in Mexico.”
Mark David Zaltzman, CFO of Su Casita said, “Our company is pleased to
have built a strong partnership with IFC in working together to develop
the housing sector in Mexico. IFC’s financing is a vote of confidence
in our operations, and we look forward to deepening our relationship further.”
Atul Mehta, IFC’s Director for Latin America and the Caribbean, noted,
“Our support to Su Casita is another step in our housing strategy for
Mexico. It fits well with IFC’s approach to develop a broad-based housing
finance market, an important building block for the country’s financial
IFC’s strategy in Mexico’s housing sector has adopted a phased approach.
The first phase has focused on helping develop a vibrant primary mortgage
market through local currency debt facilities to major originators in the
sector, including Su Casita, Hipotecaria Nacional, and Hipotecaria Credito
The second phase is more focused on ensuring development of the country’s
secondary mortgage market. In this second phase, IFC will focus
on providing warehouse credit lines to support mortgage securitization
programs, credit enhancement facilities for residential MBS and other capital
market securities, and also support the development a viable secondary
mortgage market conduit. This revolving credit line to Su Casita
and a recent IFC line to GMAC Financiera, consisting of a warehouse mortgage
line and credit enhancement facility to support its secondary mortgage
market activities, are consistent with the objectives of this second phase.
Throughout, IFC has collaborated with Mexico’s Sociedad Hipotecaria Federal
(SHF), ensuring consistency with the local authorities’ views for its
approach to developing the housing market.
A functioning mortgage system will help create a more liquid housing market
and enable more first-time buyers to purchase their own property, which
in turn will help improve living standards.
IFC in Mexico:
In fiscal 2004 (July 2003-June 2004), IFC provided $707 million in financing
(including $259 million in syndications) to Mexico’s private sector. This
was IFC’s largest volume of financing to any one country during the year.
The FY04 projects covered IFC’s priority areas, such as infrastructure,
manufacturing, the financial sector, and the social sector, which includes
health and education. As of March 2005, IFC’s portfolio in Mexico stood
at $833 million, or 6.43 percent of IFC’s overall portfolio.
The mission of IFC (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 FY04, IFC has committed more than $44
billion of its own funds and arranged $23 billion in syndications for 3,143
companies in 140 developing countries. IFC’s worldwide committed portfolio
as of FY04 was $17.9 billion for its own account and $5.5 billion held
for participants in loan syndications.
About Su Casita:
Su Casita (www.sucasita.com.mx)
was established in 1994. As of December 2004, it had total assets
of $1.85 billion equivalent and shareholders’ equity of $127 million equivalent.
Su Casita is wholly owned by Grupo Su Casita. Grupo Su Casita, in
turn, is majority owned by Caja Madrid of Spain, with a 25 percent stake;
Pulte Mortgage Corporation, the second-largest U.S. homebuilder; Mexican
homebuilders, including Corporacion GEO; individual shareholders; and IFC.
Since 2000, Su Casita has built its presence, first in the debt capital
markets, then, beginning in 2003 and 2004, in the secondary housing finance
market through securitizations of mortgages and construction loans. Su
Casita launched two out of its five issuances of mortgage-backed securities
in the local capital markets, and in April 2005, it launched its first
cross-border securitization of construction loans.