As a means of regaining liquidity and promoting financing schemes for this market, and promoting the growth of the primary and secondary housing markets, SHF proposes the standardization and improvement of criteria to securitize construction loans (BORHI-Bridge Loans or BORHI-Puentes).
Also, investors and rating agencies have stated the need for quality oversight (certification as SHF BORHI) of the assets in these structures, as well as periodic provision of information for monitoring and investment, as occurs with SHF’s BORHIs and BONHITOs.
BORHI-Puentes will have strict criteria for eligibility, among which we can mention:
Structure:
Enhancers are reinforced and the originator maintains an interest in the performance of the structure by retaining the certification. Also, the transfer of cash flows directly to the trust is assured.
• No exchange risk.
• AAA rating.
• Substitute manager.
• There are no mechanisms for repurchase or substitution of portfolio.
• Clauses on advance amortization.
• Initial cash flow and retention of certification.
• Partial financial guarantee or GPO.
• One month interest reserve.
• Minimum interest surplus of 150 base points (net of expenses).
• Transfer of cash flows from the promoter directly to the trust.
Collateral:
Implement strict criteria for eligibility that guarantee the quality of assets.
• Performing loans related to mortgage activities and limited for acquisition of land and infrastructure (15%).
• Maximum LTV 65%.
• Establishment of limits on geographic concentration and by promoter.
• Master portfolio manager.
• Periodic audits of trust information and cash flow.
Periodic information:
Properly reveal the structure’s cash flows.
• In accordance with CNBV regulations.
• If the trust’s information and cash flows are not properly revealed, there will be a severe penalty under the Securities Market Act.