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 originators.
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 businesses.ssroom
