La Hipotecaria, S. A. acting as trustee, according to the terms and conditions of the Seventh Mortgage Trust, incorporated September 26, 2005 by La Hipotecaria (Holding) Inc. as trustor and beneficiary.
MBS Characteristics
MBS (Mortgage-Backed Securities) are issue in two (2) series in denominations of $1,000 each in the form of macro-titles.
Issue Amount
$10,000,000: Series A; $8,000,000 and Series B; $2,000,000.
Maturity Date
The maturity date of both series is July 1, 2021 or when the last mortgage loan in the trust is cancelled in full, whichever occurs first.
Repayment of Capital
In the case of Series A and Series B, the issuer will make partial quarterly repayments of capital.
Priority of Series A in Capital Payments:
The payment of capital of the MBS Series A is senior to the payments of capital of the MBS Series B. (See Section 2 of Part VI of the Prospectus.)
Interest Rate, Series A
The interest rate of Series A is indexed to 1.25% below the Reference Rate published quarterly by the Banking Superintendent of Panama. (See Section 3 of Part VI of the Prospectus.)
Interest Rate, Series B
Series B Interest rate is variable and will be fixed quarterly by the Administrator the Day of Calculation where begins this Period of Interest (i) dividing the balance of the Interest Account (after made the established debits in the Contract of Administration paragraph (a)(iii) of Section 3,3, without including the interests by Series B during the previous Period) between the Unpaid balance of Series B, (ii) dividing this result by the number of days of the Period of corresponding Interest, and (iii) multiplying the result by 365; being understood that the Series B Interest rate for the first Period of Interest will be the Reference Rate less three quarters of the one percent (0.75%). See Section 3 of the Part I SAW of this Informative Prospecto
Priority of Interest Payments to Series A:
The payment of interest of the MBS Series A is senior to the payments of interest of the MBS Series B. (See Section 3 of Part VI of the Prospectus.)
Frequency of Interest Payments:
The Series A will pay interest four times per year on January 1, April 1, July 1 and October 1. Series B will pay interest once per year on July 1.
Base for Interest Calculation
365 calendar days
Form of Payment:
All interest and capital will be paid in dollars of the United States of America. While all MBS are represented by macro-titles, payments will be made through authorized accounts of Latin Clear.
Guarantee
Both series are guaranteed solely by the general credit of the trust and a separate Guarantee Trust that holds legal title to all mortgage loans and Banco Continental, S.A. serves as independent trustee of the Guarantee Trust.
Use of Funds
The trustee will use the funds from this MBS issue: (i) to pay the expenses of constitution of the Trust (including legal and qualification fees, services of structuring, brokerage, and stock market, tariff of registry of the Comision Nacional de Valores and other expenses of constitution of the Trust) (approximately USS160,750) and of the Trust of Guarantee; (ii) to cancel to La Hipotecaria, S.A., in a personal view, the price agreed by the crossing to the fiduciary of the Trust of Guarantee of the identified Mortgage Credits in the Annex A of the Trust (the "Group of Mortgages") (approximately USS9,433,909) and (iii) the acquisition of titles of debt emitted by the Republic of Panama or other instruments of similar investment or superior liquidity and security, in accordance with established in the Trust and the Contract of Administration (approximately USS250,000).
Prior Redemption
Holders of both series will receive partial and periodic payments of capital approximately equivalent to the amortization of capital of the mortgages that comprise the trust.
Fiscal Treatment
Interest payments on these MBS are exempt from local income taxes as per Panamanian law. If the MBS were not placed in the form before described, the interests that are paid to their possesors will cause a tax on the rent of the five percent (5%), that will have to be retained by the legal person who pays them or credits.
Trustee and Administrator:
La Hipotecaria, S. A.
Trustee of Guarantee Trust:
Banco Continental de Panama, S.A.
Investment Bankers:
Wall Street Securities, S. A.
Payment Agent
Banco Continental de Panama, S.A.
Stock Exchange
Bolsa de Valores de Panama, S. A.
Custody Agents
Central Latinoamericana de Valores, S. A. (LatinClear).
