The robust issuance in Mexican residential mortgage-backed
securities (RMBS) during 2003-2007 is now a distant memory.
Issuance in RMBS and in other asset-backed securities (ABS) has
ground to a halt in the asset class, for all but
government-backed entities such as Infonavit and Fovissste.
There is still a need for home financing, though, and there are
plenty of small and mid-sized companies in Mexico that could be
seen as candidates to raise funds through securitization.
Issuers and investors are still confronting several key
regulatory and market issues as they look to get the stagnant
Mexican securities market slowly back on its feet.
Fixed in Place?
Mexicans are optimistic about a rebound in the domestic securitization market. However, several challenges remain and volumes still lag peak pre-crisis levels.
A lack of consistency and transparency are two main issues
in need of resolution, particularly in the RMBS sector. Also,
delinquency rates on some debt remain relatively high,
resulting in investor confidence in the asset class that has
yet to recover fully, making a revival challenging.
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