October 2019 by Latin Finance
Mexico’s Crédito Real said it has placed MXN750 million ($39.2 million) in the local bond market under a consumer loan securitization program.
Arranged by BBVA, Santander and Banorte, the five-year notes priced at 215 basis points over the TIIE interbank lending rate, Crédito Real said in a statement.
According to Finacity, which acted as the structuring agent on the deal, the new notes priced 10 basis points below the low end of the target range and orders reached 1.2 times the issued amount.
The notes, part of a MXN10 billion bond program, are backed by personal loan payments deducted from social security checks for pensioners and retirees, Crédito Real said.
“Our securitization program has become an important funding source that has allowed us to become a frequent issuer in the Mexican capital markets and to continue to diversify our funding needs and to give us access to long term funding in local currency,” Crédito Real Treasurer Claudia Jolly said in the statement from Finacity.
Fitch and HR Ratings both assigned the notes a AAA rating on the local scale, according to Crédito Real. The Mexico City-based consumer lender said it will use the money for general corporate purposes.
Last month, Crédito Real issued €350 million ($389 million) in eight-year notes at 5%, led by Barclays, BNP Paribas and Morgan Stanley. It also sold $400m in seven-year dollar bonds at 9.5% in February.
The lender had MXN37.5 billion in debt at the end of September this year, up 34.5% from the same time last year, according to its latest financial results.