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Fitch Assigns Fondo Mivivienda's CHF250MM Senior Unsecured Bonds 'BBB+' Rating

May 23, 2014

MONTERREY, Mexico--(BUSINESS WIRE)-- Fitch Ratings has assigned a rating of 'BBB+' to Fondo Mivivienda S.A.'s (FMV) recent issuance of CHF250 million of senior unsecured fixed rate bonds.

The bonds will mature on June 13, 2018 and will carry a 1.25% fixed interest rate; interest payments will be made annually until maturity; and principal will be payable at maturity. FMV intends to use the net proceeds from the issuance for general corporate purposes.

KEY RATING DRIVERS

The assigned rating of the bonds is equal to the entity's long-term foreign currency Issuer Default Rating (IDR) of 'BBB+'. The ratings of FMV are support driven and reflect Fitch's perception of the high probability of support it would receive from the Republic of Peru (long-term IDR 'BBB+'/Outlook Stable), should it be required.

FMV is an integral and key part of the government; it has an increasingly important role implementing policies to reduce the housing deficit in Peru. Hence, support from the government should be forthcoming, if needed, which underpins the fact that the entity's IDRs are aligned with the sovereign's.

FMV was established by the Peruvian Government to promote and finance housing, especially related to social interest. FMV operates as a second-tier bank providing long-term and low-cost funds to its target sectors by lending through Intermediary Financial Institutions (IFIs).

FMV's loans are placed through a trust to IFIs (nearly 85% of the total assets). The related cash flows are administered through the trust. Under Peruvian law, assets held in trust are considered to be bankruptcy remote, consequently in the event of a bankruptcy holders of the rated bonds will not have a direct claim to the assets held by the trust.

The bonds are senior unsecured, but in the event of liquidation will be subordinated to labor claims, tax claims, all the future secured indebtedness, and to other debt and obligations that in case of insolvency are granted preferential treatment under Peruvian law.

RATING SENSITIVITIES

The senior unsecured bonds rating is sensitive to any changes in FMV's IDR. As a state-owned financial institution, deeply integrated within the government's structure, FMV's creditworthiness and IDRs are directly linked to those of the Republic of Peru; hence, its ratings should move in line with any potential change in Peru's sovereign ratings.

Although not a baseline scenario, the senior unsecured bonds rating could be driven by the entity's financial profile, if Fitch perceives a decrease in the strategic importance of FMV to the government or a lower propensity of the sovereign to provide support. In such case, the senior unsecured bonds rating could be lower than FMV's IDR, given the amount of assets pledged through the trust.

For further information on the drivers and sensitivities of FMV, please refer to Fitch's latest Rating Action Commentary and Full Rating Report on the company, available at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Global Financial Institutions Rating Criteria' (Jan 31, 2014).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=732397

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=831471

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Veronica Chau, +52-81-8399-9169

Director

Fitch Mexico S.A. de C.V.

Prol. Alfonso Reyes No. 2612

Piso 8, Col. Del Paseo Residencial

Monterrey, N.L., 64920 Mexico

or

Secondary Analyst

Mark Narron, +1-212-612-7898

Director

or

Committee Chairperson

Alejandro Garcia, +52-81-8399-9146

Senior Director

or

Media Relations

Elizabeth Fogerty, New York, +1-212-908-0526

elizabeth.fogerty@fitchratings.com

Source: Fitch Ratings


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