Bogotá, Colombia, July 16, 2001
─Today, the International Finance Corporation (IFC), the private sector arm of the World Bank Group, has signed an agreement to provide a US$40 million equity investment to create Colombia’s first secondary mortgage company,
Titularizadora de Colombia
. IFC has also approved a local currency guarantee facility of $100 million to support the development of the company.
IFC’s investment will help provide affordable financing to home buyers and lower the cost of mortgage loans as well as strengthen Colombia’s financial markets by making
Titularizadora de Colombia
available to banks as a liquidity facility and guarantor of mortgage-backed securities.
Titularizadora de Colombia
will be an independent, multifunction company with the objective of acquiring and securitizing high-quality residential mortgage loans. It will help improve the efficiency of loan origination and will create standards in a number of aspects of mortgage lending and practices. In addition, the new entity is expected to facilitate liquidity through the purchase of qualified mortgage loans from any qualified mortgage originator.
Karl Voltaire, IFC’s Director for Latin America and the Caribbean, said that IFC’s investment “will contribute to the reactivation of the construction industry in Colombia, as well as promoting economic and social development through the creation of new jobs and affordable housing.” Mr. Voltaire noted that “IFC has played a critical role in catalyzing new capital and human resources from the key actors of the country’s financial industry for this project.”
The sponsors of the new company include Banco Davivienda, Colmena Establecimiento Bancario, Conavi Banco Comercial, Corporación de Ahorro Y Vivienda AVVillas, Red Multibanca Colpatria, Compañía de Seguros Bolivar S.A., Corfinsura, Compañía Inversora Colmena S.A, Adquivalores S.A., and IFC with a 21.25 percent equity participation.
Grupo Bolivar, Grupo Social, Grupo Suramericana, Grupo AVVillas and Grupo Colpatria are five of the largest, most established private groups in Colombia, and hold 64 percent of the financial sector and the majority of the mortgage market in the country.
Paolo Massimo Martelli, IFC’s Andean Region Representative in Bogota, added that “the creation of the new company will deepen the liquidity of the mortgage market, while boosting the development of Colombia’s capital markets by offering a standardized high-quality set of mortgage backed securities that more accurately match the long-term requirements of the nation’s pension funds and other institutional investors.”
Mauricio Cárdenas, CEO of
Titularizadora de Colombia
, said that “the new company is a breakthrough in the history of the Colombian capital markets.” He added that “it will modernize mortgage financing, providing families with more and better possibilities to buy a home, and will bridge the gap between the institutional investors, willing to purchase long-term high yield securities and the Colombian households that need efficient financing.” According to Mr. Cárdenas “this project starts a new era in the housing sector in Colombia.”
The mission of IFC (
www.ifc.org
), 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 emerging markets, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
