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| Summary of Project Information (SPI) |
| This Summary of Project Information is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
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| Project number | 24296 |
| Project name | Hipotecaria Su Casita, S.A. de C.V. - SOFOL - Warehousing Line |
| Country | Mexico |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Hipotecaria Su Casita, S.A. de C.V. - SOFOL |
| Environmental category | C |
| Date SPI disclosed | April 22, 2005 |
| Projected board date | June 9, 2005 |
| Status | Active |
| Previous Events | Invested: December 21, 2005
Signed: June 27, 2005
Approved: June 8, 2005 |
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| Description of company and purpose of project |
Hipotecaria Su Casita, S.A. de C.V. (HSC or Su Casita) is Mexico’s second largest Sofol (specialized mortgage lending institution) by market share. Its main function is to extend mortgage loans to low-income individuals under the auspices of SHF (Sociedad Hipotecaria Federal) financing programs, and to provide construction financing to developers of low-income housing. It controls approximately 18% of the mortgage market served by Sofoles, based on total loan portfolio. It has 107 offices in Mexico. Su Casita was established in 1994. As of December 2004, it had total assets of $1.85 billion equivalent and shareholders’ equity of $127 million equivalent. It is rated A3.mx (national scale issuer rating), and Ba3 (global scale local currency issuer rating) by Moody’s, and A-.mx by Standard and Poor’s.
HSC has grown at a rapid pace since its inception a decade ago, given the high demand for low-income housing in Mexico. To enable it to continue to grow in step with the market and to diversify its funding source from the SHF, its strategy is to maintain its ongoing securitization program, thus enabling it to free up its balance sheet of assets so securitized. The purpose of IFC’s loan is to support HSC in this securitization program. IFC’s loan will be collateralized by a pool of mortgages that will satisfy IFC-stated criteria and be held in a Security Trust. This loan will thus readily enable Su Casita to support its securitization from a pool of high-quality assets that will already be in the Trust. |
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| Project sponsor and major shareholders of project company |
| The project sponsor is Hipotecaria Su Casita. HSC is wholly owned by Grupo Su Casita. Grupo Su Casita, in turn, is majority owned by Caja Madrid of Spain with a 25% stake, Pulte Mortgage Corporation (the second-largest U.S. homebuilder), Mexican homebuilders (including Corporacion GEO, one of Mexico’s largest homebuilders), individual shareholders, and IFC. |
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| Total project cost and proposed IFC investment |
| The proposed IFC investment is a Mexican peso-denominated revolving line of credit, for IFC’s own account, of $50 million equivalent, secured by a pool of mortgages that will satisfy IFC-specified criteria. The mortgages will be held by a trust separate from the borrower. |
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| Location of project and description of site |
| The location of the project is at the headquarters of Hipotecaria Su Casita in Mexico City, Mexico. |
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| Project Development Impact and IFC's Role |
The project is expected to have a high development impact in the following areas:
- Extension of housing finance to a large number of previously underserved groups:
As a Sofol, HSC’s principal business focus is on the low-income and social housing segment in Mexico. By providing increased sources of residential financing to this and the middle-income segment of the domestic population, the project will help to address the country’s current housing deficit and make the purchase of homes more affordable, particularly to a larger number of poor consumers.
- Capital market development:
The project will support HSC in its ongoing mortgage securitization program, and thus assist in and support the development of a relatively new risk asset class in the domestic capital market that fits well with the investment needs and objectives of institutional investors in Mexico.
- Diversifying funding source:
As the SHF is shifting from its original role of supporting Sofols through funding to providing guarantees, it is imperative for Sofols to identify and employ alternative sources of financing. IFC is serving a highly critical role during this funding transition in the Sofol sector. |
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| Environmental and social issues - Category C |
This is a category C project according to IFC's environmental and social review procedure. The nature of HSC's portfolio (low- to middle-income residential mortgage loans) means that there will be minimal environmental impacts associated this investment. Therefore, no further environmental or social analysis is required.
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| To contact the project company, please write to: |
Mr. Manuel Campos, Vice President
Av. San Jeronimo No. 478, 4to. Piso
Col. Jardines del Pedregal
México, D.F. 01900
Phone: 52-55-5481-8206
Fax: 52-55-5481-8353 |
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