Access to financial systems and the development of real estate markets have profound consequences for people’s quality of life. For example, in Trinidad and Tobago, the real estate sector has been affected in recent years by a shortage of land for housing development, high prices, and limited financing for low-income families.
To improve access to mortgages for people with low and medium incomes in Trinidad and Tobago, IDB Invest issued a partial loan guarantee for TT$120 million, equal to $17.6 million, to support the issuance of a mortgage-backed bond amounting to TT$400 million, equal to a total of $58.9 million. The bond term was five years, and due to the characteristics of the IDB Invest guarantee, the issue was over-subscribed. This is the first IDB Invest project that contributes to the development of the capital market in small, island nations and to the development of the real estate market.
The resources from the issue will allow TTMF to expand the number of mortgages it offers and to continue offering financial products targeting the specific needs of the most vulnerable populations.
Providing access to financial systems in Trinidad and Tobago
The Project consists of a guarantee for up to TTD 203 million Trinidadian dollars (“TTD”), equivalent to US$30 million, to support a TTD670 million bond issuance by TTMF. TTMF provides residential mortgages to buy houses, land, home improvement, and home equity. The IDB Invest’s role will be to issue a Partial Credit Guarantee (“PCG”), for 30%-50% of the total bond issuance, with the goal of improving the rating profile for the TTMF bond. The bond will have a five-year tenor.
TTMF focuses on providing affordable residential mortgage financing in Trinidad and Tobago. As a not deposit taking institution, TTMF relies primarily on bonds to fund its lending operations. The proposed project will be approved under the following delegated facility: “Debt Capital Markets Program.”