Some international investors, who previously shunned the Mexican mortgage market because of its relatively small size, are beginning to buy in, with issues paying yields as much as 2 percentage points above comparable U.S. Treasuries, Reuters reports.
Luis Arce, chief financial officer of New York hedge fund Christofferson, Robb and Company, which manages $1.5 billion of assets, said that they had seen stronger interest in the Mexican market from some international investors now that there were some adverse outcomes in the U.S. subprime market. But now Mexico’s mortgage industry is attractive compared to the U.S. sector – and is expanding fast.
Outstanding mortgage-backed bonds in Mexico stand at $6 billion, having grown from virtually nil in 2003. The market is likely to double in size annually for the next three years, according to Edward Skelton, an economist at the Dallas Federal Reserve Bank.