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HSBC Mexico coming to market with peso RMBS

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HSBC Mexico has registered a Ps10 billion ($911 million) RMBS program with the Mexican stock exchange, a first in the local market for the international bank. HSBC is self-arranging, and the legal advisor is White & Case. Details on a first deal were unavailable as of press time but a source familiar with the program said that information on its debut would be coming out in two to three weeks. The initial tap is going to be in straight pesos, he added. Most RMBS in the country have been denominated in inflation-indexed units (UDIs), as are the bulk of Mexican mortgages.

Nonbank originators known as Sofols have monopolized the RMBS market in Mexico over the last few years. So far, the only exception has been Banco Mercantil del Norte, which issued a deal of slightly over Ps2 billion in December.

As of June 2006, HSBC Mexico’s mortgage portfolio consisted of 17.7 million loans, roughly 13% of the bank’s loans. The number of delinquent mortgages totaled 977,117.

Elsewhere, the market is buzzing with talk that Sofol Su Casita is planning a cross-border RMBS via Credit Suisse. According to one market source, the deal will likely carry a monoline wrap and be issued in dollars, which would mean that a currency swap would figure as well.

Su Casita also has a re-tap in the works for a deal backed by construction bridge loans, with a senior tranche wrapped by Ambac. The initial issue came in September and totaled Ps1 billion. An 875-million A-piece priced at 15 basis points over 28-day TIIE.

As of press time, there was no word on the timing of the re-tap, which is being arranged by ING.

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