OPIC Board Approves $100 Million for Mortgage Project in Guatemala

November 1, 2011

(OPIC) First Market-wide Mortgage Origination Platform in Country Will Make Homes More Affordable

WASHINGTON, D.C. – Affordable home ownership in Guatemala received a boost following the approval of $100 million in financing by the Board of Directors of the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution. The project will establish the country’s first multi-bank, market-wide mortgage platform, generating approximately 2000 mortgages and offering Guatemalans more affordable loans than those currently available.

Through an established network of banks, Mercury Mortgage Finance-Guatemala Ltd. will use the OPIC financing to provide long-term, U.S. Dollar mortgages to low- and middle-income home buyers in Guatemala. Mercury will also periodically securitize the mortgage loans and issue mortgaged-backed notes in Guatemala, El Salvador, Honduras, Costa Rica, Panama and Colombia.

Guatemala currently faces a housing deficit of more than one million homes. Local banks rely heavily on short-term deposits to fund their longer-term mortgage portfolios and predominantly offer local currency, floating rate loans for no more than 10 to 15 years. They also tend to overlook the lower-income market segment.

“By filling a gap in housing finance for low- to middle-income families, this project enables Guatemala’s mortgage industry to make an important leap forward. The entry of Mercury Mortgage Finance-Guatemala into the market will mean more affordable housing loans than are currently available,” said OPIC President and CEO Elizabeth Littlefield. “That in turn will encourage property developers to increase the supply of new housing units, so the multiplier effect of this project will extend to construction firms and suppliers of materials and appliances, creating much-needed jobs in the process.”

The U.S. sponsors of the project are Hencorp Becstone, LLC, an independent investment banking and asset management group based in Florida, and the Eduardo Solorzano Family Trust. Local sponsors include Ramon Campollo, Juan Buitron and Grupo Financiero de Occidente.

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