These are the assets that form part of the Universalidad. They include without limitation the mortgage loans, all the primary and additional rights derived from said loans, the rights in and to the Insurance, the rights in and to FRECH and the Additional credit enhancement mechanisms, the assets derived from or related to the TC Facility Agreement, and any other right arising from the mortgage loans or its collaterals. For more information please see the Issue Prospectuses in section Issues, under Issue Information.
The origin of Mortgage-Backed Securities is the purchase of mortgage loans by Titularizadora from entities that grant mortgage loans to the public. The mortgage loans purchased form a Universalidad and the investors that purchase the securities in a securitization process are entitled to receive the money flows derived from said securities and other rights as set out in the rules of the Issue. With the money received for the loans (installment payments), Titularizadora pays principal and interest of the securities.
a. Issues (Primary Market) For each issue, Titularizadora determines the underwriter firms, stockbrokers that will be in charge of giving advice to the interested investors and support the promotion of the securities. In order to participate in the primary underwriting (auction) of securities, investors will contact any of the brokers authorized to act as underwriters and put a purchase offer for the securities through said brokers. b. Investments subsequent to the Issues (secondary market) Ask any stockbroker or intermediary for advice in your investment decision on mortgage-backed securities according to your needs and expectations.
The minimum underwriting amount of the TIPS on the primary market will be Ten Million Colombian pesos (COP 10,000,000). The minimum amount of the TIPS-UVR underwriting in the primary market will be the equivalent to 100,000 UVRs.
Principal amortization is based on the flows generated by the mortgage loans securitized. Interest and principal payments to the bondholders are made on a monthly basis starting on the issue date. On each payment date, they are based on the value in effect on the corresponding payment date and, in all cases, according to the payment priority.
If the payment date does not correspond to a business day, interest on TIPS are paid on the immediately following business day. No interest shall be accrued for the period between the payment date and the immediately following business day. Without detriment to the foregoing, if the last payment date does not correspond to a business day, interest on TIPS will be paid on the immediately following business day. In such cases, interest on TIPS will be accrued for the period between the last payment date and the immediately following business day.
After the underwriting, TIPS will not be subject to any trade minimums or multiples. The reference for trading will be the bondholders outstanding principal balance of TIPS of the corresponding tranche as of the date the relevant transaction takes place, and in any case the trade amount will not exceed said balance. In any event and considering that the TIPS amortization and early principal payments resulting from trigger events may reduce the outstanding principal balance in up to one (1) unit of Colombian Pesos (COP 1.00), then the TIPS may be transferred up to that value.
Financial returns accrued during the TIPS E effective term are exempt from income and complementary taxes in the terms of Law 546/1999 §16 as modified by Law 964/2005 §81. In addition, pursuant to that regulation the inflation component of the TIPS E securities will not be deemed as taxable income under any circumstance.
TIPS N financial returns accrued during their effective term are taxable with the income and complementary tax. The exemption applicable to TIPS E securities lost effectiveness for new issues carried out after December 23, 2010.
The business day before the payment of each issue, the Structuring and Risk Director´s Office releases the table of amortizations in prepayment and valuation scenarios for the valuation of securities.