Japan's Government Housing Loan Corp. (GHLC) has launched its second securitization, a 50 billion single tranche deal. The notes are backed by about 2,807 mortgage loans worth 55 billion. GHLC launched its 50 billion inaugural issue in March, and will now issue 50 billion every quarter, via lead manager Credit Suisse First Boston.

The transaction has a similar structure to GHLC's first issue, which does not involve a special purpose vehicle. GHLC will issue 50 billion notes to investors, and as security for the payment obligations on the notes it will entrust a portfolio of residential mortgage loans to a trust held by Mitsubishi Trust & Banking. GHLC will use its own funds to pay down the notes, and as it pays, a corresponding amount of the receivables will be released to GHLC by the trustee, and a relevant proportion of the trust cancelled.

The notes are issued as one tranche and rated triple-A by Standard & Poor's. The rating is dependent on the credit quality of GHLC, because the structure does not involve a true sale. Final maturity is in 2036.

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