WASHINGTON, D.C., June 30, 2004 —
The International Finance Corporation, (IFC) the private sector arm of the World Bank Group, will provide a $15 million loan for its own account to La Hipotecaria Panama, to facilitate its successful business of originating and securitizing mortgages in Panama. The project would permit La Hipotecaria to further expand its operations in Panama.
The transaction, signed by Mr. Jyrki Koskelo, Director of IFC’s Global Financial Markets Department and John Rauschkolb, Chief Executive Officer of La Hipotecaria, illustrates IFC’s strategy for the housing sector in the Central American region and a strong commitment to working with regional players.
Mr. Koskelo, stated, “IFC’s partnership with La Hipotecaria will provide access to affordable housing for the lower to middle income segments of the population. Moreover, this investment will help strengthen the local capital markets by facilitating the origination of mortgage loans to La Hipotecaria, a pioneer in the country in issuing mortgage backed securities. ”
Mr. Rauschkolb said “IFC’s support will help La Hipotecaria to expand its mortgage activities for the middle-low income segment, in Panama, particularly in regions not currently served by other mortgage originators.” He added: “In collaboration with IFC, we will further develop the local mortgage backed securities market and reinforce the company’s efforts to expand its operation in other Central American countries.”
Also participating in the signing, Mr. Bernard Pasquier, IFC’s Director of the Latin America and Caribbean Department, noted: “IFC’s investment corresponds to key aspects of IFC’s strategy for Central America, by supporting institutions that have a regional focus. This transaction demonstrates the potential impact of this strategy for a sector that is a priority for most of the Central American countries.”
La Hipotecaria, which operates in Panama and El Salvador, is the only specialized full service housing finance company in Central America and the only entity to date that has issued mortgage backed securities in the local capital markets in any of the Central American countries. The company specializes in originating and servicing residential mortgages to individuals mostly in the low to middle income segment of the market and has developed a successful business of securitizing mortgages in Panama.
La Hipotecaria (Holding) Inc., which owns 100% of the two operating companies in both Panama and El Salvador, is 87% owned by Grupo ASSA, S.A, a diversified holding company. La Hipotecaria began operations in May of 1997 and as of December 2003, the Company’s mortgage loan portfolio was US$71 million, consisting of US$23 million on balance sheet and an off balance sheet mortgage portfolio of US$48 million. The Company reported US$35 million in assets and shareholders equity of US$2.6 million for 2003. It is headquartered in Panama City, Panama and extended its operations to El Salvador in November 2003. Grupo ASSA, S.A owns 100% of ASSA Compañía de Seguros, the largest insurance company in Panama. As of December 2003, Grupo ASSA reported US$277 million in assets and shareholders equity of US$172 million.
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.
