A bank in Argentina has issued $93 million of securities backed by dollar-denominated mortgages. The issue was underwritten by CS First Boston and offered privately in the United States.
The bank, Banco Hipotecario Nacional, is government-owned but may soon be privatized.
A report by Duff & Phelps Credit Rating Co. had rated both classes of the bonds BBB. "The rating reflects the level of credit enhancement provided by the 15% aggregate subordination of the Class B bonds and the certificates of participation also issued by the trust, plus the reserve fund," the report said.
While issues of foreign mortgage-backed securities in the United States are still sparse, interest is strong among potential issuers and investment banking companies, and a growing supply is expected to develop in the next few years.
Duff & Phelps said it did not expect privatization of the bank to have any impact on the credit rating of the bonds.
Banco Hipotecario will be the master servicer of the issue, while the loans will be serviced by the originating banks. AGS Financial, a U.S.- based servicing consultant, helped Banco Hipotecario develop its master servicing capability.
The bank was formed in 1886 to make low-cost mortgages but has since been reshaped to act as a wholesale bank funding construction and home loans.
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Fannie Mae announced last month that it would be doing its first securitization of Title 1 loans soon. The loans are typically made to lower-income homeowners to finance home improvements.
Now, American City Mortgage, Carson, Calif., reports that it has provided $360,000 of loans for the first pool to be offered by Fannie Mae, a $500,000 issue that has been placed with an investor.
American specializes in ethnic lending. It says it made 60% of its loans to members of minority groups last year.
American says it has been working with Fannie Mae to get the agency to accept cash on hand as a source of down payments in underwriting loans. It says many of its clients come from countries where the banking system is not well developed and they tend to keep cash at home instead of in banks.
