IIC Approves A Total Of $40 Million To Two Brazilian Companies For Purchase And Assignment Facilities


This project will improve the quality of life of low- and middle-income families On December 13, 2001, the Inter-American Investment Corporation (IIC) approved a $15 million purchase and assignment facility for Brazilian Mortgages Companhia Hipotecária and $25 million purchase and assignment facility for Brazilian Securities Companhia de Securitização to provide them with the funding to enhance both their mortgage origination process and the establishment of home equity financing. This will enable Brazilian Mortgages to provide home equity loans and originate a greater number of mortgage loans; it will enable Brazilian Securities to acquire larger volumes of mortgages for their subsequent securitization.

The project will contribute to further develop mortgage-backed securities in Brazil, a relatively new financial instrument that, as a result of the financing provided by the IIC last year to Brazilian Securities, has already been successfully placed by Brazilian Securities with local investors. There is an increasing demand for this instrument in Brazil. The facilities will help expand the availability of longer-term local investment-grade instruments that meet the demand for such instruments by insurance companies, pension funds, and other institutional investors.

By helping consolidate a liquid secondary mortgage market in Brazil, the project will improve the quality of life of low- and middle-income families, making it easier for them to become homeowners and/or giving them the opportunity to move to better neighborhoods and homes and/or to make improvements to their existing homes.

IIC's financing will allow the construction of around 5,120 new homes, with an average price of US$30,000; it will also create more than 30,000 temporary jobs in Brazil.

The Inter-American Investment Corporation is a multilateral financial institution that is part of the Inter-American Development Bank Group. It provides financing (in the form of equity investments, loans, guarantees, and other instruments) and advisory services to private enterprises in Latin America and the Caribbean. The IIC's mission is to promote the economic development of its regional borrowing member countries by stimulating the establishment, expansion, and modernization of private enterprises, particularly those that are small and medium in size.

Contact: Jorge Zelada/Victor H. Moscoso

Telephone: (202) 623-3919

Email: jorgez@iadb.org