La Hipotecaria will get a financial package of approximately $20 million from the Inter-American Development Bank (IDB) to boost residential mortgage financing to low- and middle-income individuals in El Salvador, Panama and Colombia.
The IDB financing comprises a senior, secured and revolving credit line for up to $15 million for the company’s units in the three countries and local currency partial credit guarantees to be issued in Colombia for up to 9.5 billion pesos (equivalent to $5 million). Depending on market conditions, the company may raise an additional $10 million through the IDB loan syndication program.
The financial package provided by the IDB will pave the way for La Hipotecaria to expand its mortgage portfolio while maintaining an adequate balance sheet position, according to Marisela Alvarenga, the IDB project team leader. It will also allow the company to better tap local capital markets to fund its lending, particularly in Colombia where it has recently started operations. La Hipotecaria is expected to finance purchases of as many as 2,400 additional houses annually in the three countries.
La Hipotecaria is a leading mortgage lender in Panama and El Salvador and started operating in Colombia last year. The company is a pioneer in the creation of investment-grade mortgage-backed securities offered through local and international markets to local and international institutional investors, while retaining servicing rights on all originated mortgage loans.