Summary of Proposed Investment
Project Number
11160
Company Name
SAHL INVESTMENT HOLDINGS (PTY) LTD
Date SPI Disclosed
Aug 7, 2001
Country
South Africa
Industry
Financial Markets
Projected Board Date
Sep 10, 2001
Status
Completed
Sector
Primary Mortgage Institutions
Department
Global Industry, Financial Markets
Environmental Category
C - No Impact
Previous Events
Approved : Nov 6, 2001
Signed : Nov 28, 2001
Invested : Nov 29, 2001
Project Description
The project involves the launch of South Africa''s first local currency residential mortgage securitization. SAHL''s business model is largely based on its ability to offer mortgage rates below current market levels, based largely on low-cost, securitization based funding from institutional investors. SAHL''s mortgage portfolio has now reached sufficient size to launch its first placement of mortgage backed securities in the institutional markets.
IFC’s participation in SAHL''s "maiden" securitization will significantly increase the probability of a successful placement, which is a fundamental requirement for the success of SAHL''s business model. IFC will also be able to add a lot of value in the structuring period, based on its experience with similar initiatives in other emerging markets. The project is also in line with IFC''s strategy to develop and modernize the housing finance sector in emerging markets through investments in model transactions that other investors may wish to follow.
The proposed project will be an efficient way of channeling long-term financing from institutional investors in MBS to retail home mortgage borrowers. The project is expected to have a significant developmental impact in a number of areas: (i) it will improve the feasibility of the securitization of domestic assets in South Africa by allowing the accumulation of an economically efficient sized pool of assets, (ii) it will introduce the concept of securitization warehouse lending in the local banking market and (iii) by helping a pioneering initiative like SA Home Loans succeed the project will improve competition in the domestic market for housing finance.
IFC’s participation in SAHL''s "maiden" securitization will significantly increase the probability of a successful placement, which is a fundamental requirement for the success of SAHL''s business model. IFC will also be able to add a lot of value in the structuring period, based on its experience with similar initiatives in other emerging markets. The project is also in line with IFC''s strategy to develop and modernize the housing finance sector in emerging markets through investments in model transactions that other investors may wish to follow.
The proposed project will be an efficient way of channeling long-term financing from institutional investors in MBS to retail home mortgage borrowers. The project is expected to have a significant developmental impact in a number of areas: (i) it will improve the feasibility of the securitization of domestic assets in South Africa by allowing the accumulation of an economically efficient sized pool of assets, (ii) it will introduce the concept of securitization warehouse lending in the local banking market and (iii) by helping a pioneering initiative like SA Home Loans succeed the project will improve competition in the domestic market for housing finance.
Sponsor / Cost / Location
Development Impact
Related ESRS/ERS
Contacts
For Inquiries About the Project, Contact
Simon Stockley, Managing Director
No.1 The Glades, 78 Armstrong Avenue, La Lucia - Durban, 4051, South Africa
E-Mail: simons@sahomeloans.com
No.1 The Glades, 78 Armstrong Avenue, La Lucia - Durban, 4051, South Africa
E-Mail: simons@sahomeloans.com