GC acted as counsel to HIR Casa in the establishment and authorization by the National Banking and Securities Commission of Mexico (CNBV) of a new securitization program of mortgage credits for up to MXP$4 billion

Deal Description
Acted as independent counsel to HIR Casa (Bienes Programados) in the establishment and authorization by the National Banking and Securities Commission of Mexico (CNBV) of a new securitization program of mortgage credits for up to MXP$4 billion, as well as in the first issuance of certificados bursátiles fiduciarios under such program in the Mexican Stock Exchange (HIRCB 23) for MXP$1.5 billion.

Banco Invex acted as issuing trustee, BBVA and Santander as underwriters, and CI Banco as common representative of the bond holders.

The issuance with a credit rating of AAA grated by Fitch Ratings and HR Ratings, and with a demand of 1.74x of the initial target amount.

This transaction represented the come back to the securities market in Mexico of a non-banking financial institution (IFNB, for its acronym in Spanish) after the prior complications of certain entities in such sector and demonstrated the trust of the investors and strength of HIR Casa.

Likewise, with the proceeds of the offer HIR Casa prepaid two facilities designed for the origination of loan from HIR Casa and a further securitization: one syndicated loan in which BBVA Mexico acted as creditor and agent, as well as one secured loan also with BBVA Mexico, which implied a quite complex mechanic for the allocation of proceeds, and obtaining confirmations of multiple creditors (mostly due to the syndicated loan) at closing of this transaction.

Innovation & Additional Comments
Reiterated mention that this transaction represented the come back to the securities market in Mexico of a non-banking financial institution (IFNB) after the lack of trust of investors given the defaults and bankruptcy proceedings initiated by AlphaCredit, Crédito Real and Unifin.

Likewise, with the proceeds of the offer HIR Casa prepaid two facilities designed for the origination of loan from HIR Casa and a further securitization: one syndicated loan in which BBVA Mexico acted as creditor and agent, as well as one secured loan also with BBVA Mexico; which implied a quite complex mechanic for the allocation of proceeds, and obtaining confirmations of multiple creditors (mostly due to the syndicated loan) at closing of this transaction.

Governing Law
Mexico

Deal Value

Program: MXP$4 billion

First Issuance: MXP$1.5 billion

Deal Duration, Date of Closing / Signing
Kick-Off: February, 2023

Closing: June 23, 2023

Team GC
Bernardo Reyes Retana K. – Partner
Francisco J. Alvarez C. – Associate
Diego Hernández A. – Associate
Erika Botas V. – Law Clerk

Other firms involved
Creel, García-Cuéllar, Aiza and Enríquez, S.C., as counsel to the rating agencies.