Banco Hipotecario28 March 2016
Created in 1886 by the government of Argentina and privatized in 1999, Banco Hipotecario has been a leading mortgage lender in Argentina and the largest provider of mortgage payment insurance services
Created in 1886 by the government of Argentina and privatized in 1999, Banco Hipotecario has been a leading mortgage lender in Argentina and the largest provider of mortgage payment insurance services.
In addition to being an iconic brand in the Argentina, Hipotecario is a retail bank that not only offers universal banking services to individuals, but also services companies of all sizes.
Based on a diversified funding structure and a solid foundation of deposits, in addition to their presence in capital markets, Banco Hipotecario has been able to maintain high solvency and liquidity ratios throughout the institution’s history.
Upon the election of a new government, Argentina is expecting a significant influx of foreign investment, not only in terms of manufacturing and production, but also in financial markets.
After a decade of being absent from international capital markets, Banco Hipotecario decided to issue an international bond in the US market (I44A) for US$ 200 million.
The deal process required 9 different groups of advisors to be heavily involved, including legal and consulting firms, banks responsible for placing the bond, plus the ratings agency. All deal participants were required to access, review, and edit hundreds of financial, strategic, and contractual pieces of documentation.
The option of completing the deal in person, as it had been done in the past, would have greatly delayed the debt financing, given the considerable time investment required to hold meetings, or in executive travel and secure distribution of hundreds of confidential documents.
Banco Hipotecario evaluated a number of different options and selected an Intralinks® Virtual Data Room (VDR) to securely distribute and manage information with more than 60 people. The Intralinks platform enabled hundreds of documents to be shared instantaneously and was necessary in piecing together a deal such as this one.
After becoming familiar with the platform, Banco Hipotecario’s Capital Markets team learned how to upload dozens of thousand-page documents onto the VDR, quickly and in a well-organized manner, and with the highest level of security possible. Plus the team used robust permissioning features to manage access rights not only for each document, but for each participant.
“Intralinks Designer helped us easily configure the Virtual Data Room: we uploaded, classified, and managed information easily, while remaining entirely focused on the strategy,” said Daniel Merino, Capital Markets Manager at Banco Hipotecario.
Thanks to Intralinks’ support, Banco Hipotecario had capabilities that provided them with immediate access to Intralinks platform capabilities.
In a matter of hours, Banco Hipotecario was able to use Intralinks collaborate with the team of legal and financial advisors who would assist in structuring and placing the I44A bond.
“This was a very positive experience, we had guidance from the project manager at all times during the process,” said Merino. “We calculate at least 75% savings in terms of time, compared to any other way of pulling together a debt financing such as this one.”
“From our perspective, the platform’s most powerful aspects include the level of security and speed at which documents are managed. The fact that we can decide who is authorized to see or print them gives us peace of mind required to fully focus our attention on generating greater value for the transaction. In fact, we even conducted vulnerability testing with third parties and were simply unable to break the platform’s security,” Merino concluded.
Moreover, and as a result of the system’s reporting capabilities, the team at the bank was able to gauge placing banks’ indication of interest. Intralinks registers and reports who has accessed the data, for how long, and how many times, which can be directly or indirectly related to the level of interest of potential investors.
An additional benefit for the team at Hipotecario was that Intralinks enabled immediate outreach to the investment community, particularly because they are quite familiar with Intralinks, and consequently spent very little time learning how to use the platform.
The bond issue was highly successful. After the window of opportunity opened to launch the deal, the Capital Markets team was able to easily close the deal and secure financing.