Inversiones Simco has placed the first $12 million of $20 million it expects to issue in the Salvadoran securities market, to finance part of the Millennium Plaza mixed-use project.
The securitization fund called Millennium was structured by Ricorp Titularizadora and amounts to $20 million.However, initially $12 million has been placed and the remaining funds will be raised as the works progress.
In El Salvador, the issuance of up to $3 million in securitization securities has been authorized in order to finance part of an apartment building construction project.
From a statement issued by the Superintendence of the Financial System:
April 24, 2018.The Board of Directors of the Superintendency of the Financial System authorized, on Thursday, April 19, the issuance of securitization securities - participation certificates charged to the securitization fund for property owned by Ricop Titularizadora Torre Sole Blu Uno, for an amount of up to $3 million.
Banco Promerica has raised $25 million from the future flow of receivables generated by remittances from Salvadorans living abroad.
The bank structured a financial vehicle through which it securitized flows of receivables generated by U.S. entities using Salvadorans to send remittances to the country.
In an article in Elsalvador.com the vice president of the securitization company Hencorp Securities SA, Victor Quijano explained, "when countrymen abroad send remittances to El Salvador, the latter may make them effective 10 minutes after the operation is made abroad, despite the advancement in technology, the money may not come as quickly to the country, therefore the bank, in this case Promerica, has to pay such remittances using its own funds, which in turn generates accounts receivable from remittance companies.
The Stock Exchange of El Salvador promotes investment in stocks and bonds and there is a noteworthy rise in trusts to finance large infrastructure projects.
The Stock Exchange of El Salvador (BVES) carried out a campaign to promote the tools that allow participation in that market. Rolando Duarte, chief of the BVES says that "people are familiar with the exchange, but there are some fears and ignorance which we want to eliminate."
The Mega Plaza Mall in Sonsonate, El Salvador, was financed through the issuance of securities that will be paid with future cash flows generated by the rental of stores.
"... last year the city turned to the Stock Exchange of El Salvador (BVES) to securitize $12.4 million at 6% interest, whereas if they had taken out a bank loan the rate they would have paid would be around 11%", said Roberto Aquino Mayor of Sonsonate, according to an article in Elsalvador.com."
93% of the $58 million raised by the securitization of future revenues of the International Airport of El Salvador were provided by Pension Funds.
Editorial
The administrators of the pension funds are obliged to invest mainly in government bonds, and this significantly affects the low returns earned by contributors in those funds.
The case of the securitization by the Autonomous Executive Port Commission (CEPA) to obtain funds to finance the modernization of El Salvador International Airport, is a good example of how we can better invest capital from pension funds, while obtaining better financing for public works, and so that the financial profits stay within the country.
The Autonomous Executive Port Commission has announced that next January refurbishment of the International Airport of El Salvador will start.
This comes after having secured funds through a securitization and a loan from Central American Bank for Economic Integration.
"Some works have already started, such as the remodeling of the stairs in the passenger reception area, a passenger elevator and improved air conditioning in part of the airport.
The modernization of El Salvador International Airport will be financed with a securitization fund of $77.7 million.
The company Hencorp has been chosen by Comisión Ejecutiva Portuaria Autónoma (CEPA) to structure the securitization on the Stock Exchange of El Salvador.
Of the proposals by the two securitization companies invited to participate, the board of CEPA selected Hencorp based on lower process costs (structuring, placement and securitization fund management).
In the absence of state resources for public infrastructure projects, securitization is an alternative for funding.
El Salvador is in a second phase of securitization, where the focus is on generating assets that can be securitized, and future market opportunities are investment opportunities from financial assets, said the expert Jose Miguel Valencia.
CIPLAFIT 2012 will be held in Costa Rica from 18th to 20th April, featuring 12 keynote speakers of international standing exposing to more than 350 professionals.
This event represents an opportunity for all professionals involved directly or indirectly with trusts and securities. CIPLAD International is planning an event in this important sector, which will include 12 professionals of international standing from Mexico, Guatemala, Costa Rica, Colombia, Bolivia and Argentina sharing knowledge with over 350 professionals of various nationalities regarding the latest trends and news in this important sector .
In the last 11 months, 4 projects have netted $37 million using this mechanism.
Municipalities and schools are some of the entities that have used, successfully, sales of bonds backed by income streams, in order to finance their projects.
This has been revealed from data from the Salvadoran Stock Exchange which announced that to date, more than $37 million has been raised using this method of financing.
The securitization project to redevelop the facilities of the French School is the first of its kind in the Salvadoran Stock Exchange.
Hencorp Securities carried out the process by issuing the securities, "some of the features of the placement are a 6% yield (with a 7% ceiling) and a repayment period of 10 years," says Laprensagrafica.com.
Rolando Duarte, president of the Stock Exchange of El Salvador, told the media that securitization is a vehicle for companies and organizations to finance their projects.
This form of funding appears to be the most feasible for large public infrastructure works.
The limitations of the state budget to address infrastructure projects require the assistance of private capital, and the securitization trust model is being adopted by Costa Rican public institutions to finance these works.
There are 11 projects in various stages of the formation process of securitization trusts in various sectors such as energy, telecommunications, health, and education.