Hipotecaria Su Casita SA, Mexico's biggest private seller of mortgage debt, is going forward with plans to sell as much as $500 million of bonds after the collapse of the sub-prime mortgage debt market in the U.S.

The company, which mostly lends to low-income individuals, will seek to drum up demand by showing investors that Su Casita doesn't lend to borrowers with poor credit histories, Chief Financial Officer Mark Zaltzman said in Mexico City.
“Sub-prime is not the same thing as low-income,” Zaltzman said in a telephone interview Thursday. “To sell these bonds we are going to have to give investors clear proof that there is a difference. We're going to have to work harder.”
Su Casita expects to sell as much as 3 billion pesos ($270 million) of its mortgage-backed bonds in Mexico next month and is planning to raise $230 million in the U.S. by the end of the year, Zaltzman said.
Su Casita provides one out of every four loans to low-income individuals in Mexico.
Zaltzman said the sales are part of the company's plans to issue as much as $1 billion in debt this year, helping bolster an expansion in Mexico's housing market. Su Casita expects to issue 35,000 home loans this year, up 24 percent from 28,200 loans in 2006.
Su Casita became the first Mexican company to sell mortgage- backed debt to international investors in April when it raised about $232 million in 28-year bonds. Su Casita arranged for MBIA Insurance Corp. to insure the bonds against default, prompting Standard & Poor's to rate them AAA, the highest possible rating.
Mortgage-bond sales abroad are part of Su Casita's plan to increase its investor base. The company sells in Mexico about 70 percent of its asset-backed securities to government-regulated pension funds.
“We want to have two doors available and be able to choose which one to open,” Zaltzman said. “We just need to find the right window of opportunity.”
(Source: Bloomberg