WASHINGTON, D.C., June 25, 2004 —
The International Finance Corporation, the private sector arm of the World Bank Group, today signed an agreement to invest the Mexican peso equivalent of $100 million in Hipotecaria Nacional, the country’s largest specialized mortgage finance institution (Sofol).
Mexico has strong pent-up demand for housing, with an estimated deficit of some 4 million units, reflecting the difficult access to housing finance for most individuals – and especially the poor. Given this acute shortage of housing, IFC’s investment, a revolving warehousing line of credit in pesos, will help Hipotecaria Nacional underpin the origination of mortgage loans to low-income Mexicans.
IFC’s investment will also help support Hipotecaria Nacional’s strategy of identifying alternative funding sources while it moves from public to private sector-based funding over the next few years.
At the signing in Washington, Peter Woicke, Executive Vice President of IFC, said, “IFC is proud to partner with Hipotecaria Nacional in our first mortgage warehousing transaction in Mexico, a project with a large demonstrative effect as it facilitates the creation of mortgage financing for low-income families.” He added, “IFC’s loan will, concurrently, help deepen local capital markets and foster the development of a new asset class.”
Mr. Marcos Katz Halpern, Chairman of the Board of Hipotecaria Nacional and one of three major shareholders, said at the signing, “We are pleased to work with IFC on this landmark project, one that will facilitate the creation of many more mortgages for low-income housing in Mexico. Hipotecaria Nacional has developed an effective business model in originating and servicing mortgages in the low-income housing segment. IFC’s warehousing line will help Hipotecaria Nacional stay competitive, and foster the creation of a secondary mortgage market”.
Victor Requejo Hernández, Chief Executive Officer of Hipotecaria Nacional, said, “We welcome IFC’s partnership in enabling Hipotecaria Nacional to expand mortgage operations to a segment of the Mexican population that has limited access to mortgage finance. It also helps us transition proactively from public to private sources of funding.”
Bernard Pasquier, IFC’s Director of the Latin America and Caribbean Department, also noted: “IFC’s warehousing line addresses Mexico’s dearth of low-income housing -
an important step in
improving living standards. It is also is a first step toward development of a viable secondary mortgage market, a key ingredient in IFC’s housing finance strategy for Mexico.
Hipotecaria Nacional is a nondeposit-taking specialized mortgage finance company and is Mexico’s largest in that field. It extends residential mortgages financed by monies primarily from the Sociedad Hipotecaria Federal, a government mortgage lending instituion, mainly to low-income segments of the population.
Hipotecaria Nacional was established in 1994 and is owned by a group of Mexican entrepreneurs. Total assets of Hipotecaria Nacional as of March 2004 stood at $2.5 billion and capital at $156 million. Hipotecaria Nacional’s high credit ratings reflect its solid profitability, highly experienced management, and efficient cost-income structure.
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 FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
