Mexico Offers Credit Help for Struggling Homebuilders Jonathan Levin - Bloomberg News
go to original June 29, 2013

Mexico’s government promised to help increase lending to homebuilders to sustain construction as the industry’s biggest companies slash output and move to restructure debt.

Deputy Finance Minister Fernando Aportela said development banks will provide at least 5 billion pesos ($387 million) of syndicated credit lines. The lines, issued through Sociedad Hipotecaria Federal and Nacional Financiera, will produce about 50,000 homes, he told reporters in Mexico City. The government will also offer guarantees for debt sales of about 5 billion pesos so that issuances can get higher credit ratings and attract institutional investors such as pension funds, he said.

The financing announcement was part of the government’s retooled housing plan, which aims to arrest urban sprawl without prompting further contraction in the industry or impeding efforts to lower a housing shortage. While the plan expands a push toward city development, it also provides some concessions to help the industry adapt to a shift in subsidies that’s reduced demand for remotely-located developments, where many builders already sell homes and own land reserves.

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