HSBC was heavily involved in the mortgage market last week, taking part in both a mortgage credit offering and a Freddie Mac split-loan transaction.

The company posted a $400 million mortgage credit offering, called 2000-HSBC-1, backed by hybrid adjustable-rate mortgages.

The senior tranches are priced off of Swaps and all have a one-time put option at 44 months. The $137 million one-year tranche is targeted at +30 to +35 basis points over synthetic Libor. The $99 million three-year is +40 to +45 over Swaps and the $140 million 3.7-year class is +35 to +40 over Swaps.

The deal has a senior/sub structure.

HSBC Bank USA was also involved in Freddie Mac's $180 million split-loan transaction, which closed last week. The deal was backed by 19 separate multifamily properties in Phoenix, Tucson, Alubuquerque and Las Vegas.

HSBC originated and sold the $180 million package, which will refinance a total of 4,240 units, 4,168 of which are affordable to low- and moderate-income families.

The deal's split-loan option combines fixed-rate and Libor-based variable-rate debt. Split loans are becoming an increasingly popular financing tool for borrowers who want the flexibility of a variable-rate loan with the interest-rate protection of long-term, fixed-rate debt.

In this transaction, $135 million of the total debt originated by HSBC Bank is made up of seven-year fixed-rate debt while the remaining $45 million is composed of seven-year Libor-based variable-rate debt.

The fixed-rate components range in size from $2.9 million to $18 million while the variable-rate components range from $859,000 to $6 million. The fixed-rate and the Libor-based components are interest-only for two years, but then amortize based on a 30-year schedule.

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