Washington, D.C., Lima, December 21, 2006
—The International Finance Corporation (IFC), the private sector arm of the World Bank Group, together with Titulizadora Colombiana and Banco de Crédito del Perú (BCP) via Grupo Crédito S.A., have signed an agreement as initial sponsors to create the country’s first secondary mortgage market company, Titularizadora Peruana, with estimated capital of $3.6 million.
Titulizadora Peruana, an independent company, will acquire residential mortgage loans and structure mortgage-backed securities to develop the secondary mortgage market and expand access to housing finance in Peru. The agreement was signed in Lima by IFC’s Country Manager for Peru, Marcene Broadwater; BCP’s Central Manager for Planning and Finance, Walter Bayly; and Titulizadora Colombiana’s Chairman, Alberto Gutierrez Bernal.
“With this project, IFC is supporting the efforts of both the market and the original sponsors of Titulizadora Peruana to strengthen Peru’s secondary mortgage market by issuing high-quality, standardized mortgage-backed securities, which meet the long-term requirements of local investors,” said Marcene Broadwater. “The creation of Titularizadora Peruana fits with IFC’s strategy to support the development of a dynamic mortgage sector, addressing Peru’s housing deficit by making home financing affordable for more families.”
IFC has already approved a credit line of $50 million for Titulizadora Peruana to acquire a mortgage portfolio and improve the conditions of structured securities. IFC’s support to Titulizadora Peruana will replicate the model for development of housing and mortgage markets IFC has already implemented in Mexico, through Hipotecaria Su Casita, and in Colombia, through Titularizadora Colombiana, an institution that IFC also helped incorporate.
Walter Bayly added, “By issuing bonds, securitization institutions such as Titulizadora Peruana will be able to offer securities to investors and obtain funds to increase the availability of mortgage loans. This increase will mean that more people in Peru will be able to finance their own homes.”
Titulizadora Colombiana’s participation highlights IFC’s increasing support for south-to-south projects involving companies from emerging country markets investing in and implementing projects in other emerging country economies. IFC’s global experience, Titularizadora Colombiana’s operational experience, and BCP’s status as Peru’s largest bank will together contribute to making Titularizadora Peruana a strong and effective institution.
About IFC
The International Finance Corporation, the private sector arm of the World Bank Group, is the largest multilateral provider of financing for private enterprise in developing countries. IFC finances private sector investments, mobilizes capital in international financial markets, facilitates trade, helps clients improve social and environmental sustainability, and provides technical assistance and advice to businesses and governments. From its founding in 1956 through FY06, IFC has committed more than $56 billion of its own funds for private sector investments in the developing world and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. With the support of funding from donors, it has also provided more than $1 billion in technical assistance and advisory services. For more information, visit
www.ifc.org
.
About IFC in Peru
Since Peru joined IFC in 1956, the Corporation has provided over $942 million to over 50 private enterprises in the country, including syndications with participating banks. In FY06 (July 2005 to June 2006), IFC invested $44 million in Peru in some of the country’s priority economic sectors, including the agricultural, financial, and insurance sectors. As of June 2006, IFC’s portfolio in Peru had reached a total of $272 million, plus an additional $14 million in syndications with participating banks. Peru is the fifth most important country for IFC in Latin America and the Caribbean in terms of portfolio.
About BCP
Banco de Crédito del Perú (BCP) is Peru’s leading and oldest bank. As of September 2006, BCP loans accounted for approximately 31.6% of this sector in Peru, with deposits at around 36.0%. With regard to mortgages, BCP is Peru’s largest mortgage lender, with a market share of 37.4% of total mortgage loans.
About Titularizadora Colombiana
Titularizadora Colombiana is a private company incorporated within the framework of Colombia’s Housing Law. Major shareholders are IFC and Colombia’s leading private mortgage banks, including Davivienda, BCSC, Colpatria, Bancolombia and AVVillas. TC provides a link between the capital market and housing sectors by issuing mortgage-backed securities. These mortgage securities have been AAA rated and have therefore become highly desirable for major institutional investors. TC has also provided a liquidity facility of $2.3 billion to the primary mortgage market. Since its creation in 2001, Titularizadora Colombiana has become Colombia’s leading specialist company in securitizing such assets and the largest private mortgage backed securities provider in Latin America.
