Background on HIR Casa and its Role in the Mexican Financial Landscape
HIR Casa, a company specializing in providing credit for home purchases, has been active in the Mexican financial sector for over 30 years. Initially starting as a self-financing scheme similar to the automotive industry, HIR Casa now offers secured loans with a 33% down payment on the property value, catering to those not traditionally served by commercial banking due to credit bureau issues. The company’s clientele includes doctors, dentists, lawyers, accountants, and others with mixed income sources who are not ideal candidates for conventional bank loans.
Current State of the Mexican Stock Market and HIR Casa’s Recent Bond Placement
Eduardo Guzmán, HIR Casa’s general director, highlighted that although the new Securities Market Law passed last year is a significant step towards attracting new companies to the Mexican stock market, the market remains small. He pointed out that liquidity and depth are lacking due to insufficient investors and limited securities trading.
On May 5, HIR Casa successfully placed ₽2,000 million in bonds (approximately $104.5 million USD) with a 1.7 times oversubscription rate on the Mexican Stock Exchange (Bolsa Mexicana de Valores). The bonds consisted of ₽1,400 million (approximately $73.5 million USD) with the TIA plus 225 basis points for seven years and ₽600 million (approximately $31.5 million USD) with a fixed rate of 10.67% for eight years.
The bond issuance attracted investors such as independent advisors, investment banking firms, brokerage houses, and even development banks.
HIR Casa’s Evolution and Future Plans
HIR Casa has evolved from a self-financing scheme to offering secured loans with competitive fixed and variable rates, catering to non-traditional borrowers. The company aims to serve around 700 clients this year through a syndicated loan of ₽2,600 million from various banks and the bursatilization of its mortgage portfolio. HIR Casa’s average loan size is ₽3 million (approximately $157,000 USD).
Guzmán emphasized that despite their growth plans, including listing on the national stock market and issuing more bonds, the Mexican stock market still lacks liquidity and depth.
Sofom Cresca Issues Debt in the Institutional Securities Market
Following a joint debt issuance by four multiple-purpose financial societies (Sofomes) in the Institutional Securities Market (Biva) in October 2024, one of the Sofomes is preparing for another round of financing.
María Ariza, Biva’s general director, praised the joint issuance as a demonstration of investor benefits and noted that Créditos Especializados al Campo, one of the Sofomes, is now ready to access the market independently.
In late 2023, four Sofomes—Soluciones Financieras Internacionales, Servicios y Financiamiento Agrícola, Proaktiva, and Créditos Especializados al Campo—raised ₽336 million (approximately $17.7 million USD) with a line of credit up to ₽1,500 million (approximately $79.2 million USD) backed by the Fideicomisos Instituidos en Relación con la Agricultura (FIRA).
Institutional investors, including the Banco de Desarrollo de América del Norte (Nadbank) and BID Invest, participated in the issuance. Ariza highlighted that a Sofam returning to the market independently signifies growth potential in the Mexican stock market.
Cresca, an agricultural Sofam, provides financing to the agrifood, industry, commerce, and services sectors. Ariza emphasized that Biva’s goal is to expand the market, attract new companies, and the upcoming issuance exemplifies this objective.
Key Questions and Answers
- What is HIR Casa and its role in the Mexican financial sector? HIR Casa is a company offering secured loans for home purchases, catering to non-traditional borrowers who may not meet conventional bank criteria.
- What challenges does the Mexican stock market face? The Mexican stock market lacks liquidity and depth, with insufficient investors and limited securities trading.
- What recent bond placement did HIR Casa complete? On May 5, HIR Casa placed ₽2,000 million (approximately $104.5 million USD) in bonds on the Bolsa Mexicana de Valores, with a 1.7 times oversubscription rate.
- What is the significance of Cresca’s return to the Institutional Securities Market? Cresca’s independent market access signifies growth potential and confidence in the Mexican stock market.
