JP Morgan and Credit Suisse are said to be working on residential mortgage backed securities (RMBS) this week.
One market source told ASR, that Credit Suisse will work with Two Harbors Investment Corp, which will purchase the subordinate piece of the deal. The deal was originally repored by Bloomberg.
Credit Suisse last came to market with a private label RMBS deal in March 2012. That deal was backed mainly by MetLife loans. In November, the bank issued a deal backed by prime, jumbo mortgages purchased as part of a mortgage portfolio acquired for structured finance purposes by subsidiary DLJ Mortgage Capital.
JP Morgan is also said to be working on a privately place non-agency RMBS deal. One source said that the deal has been in the works for at least a week but the bank has not announced which ratings agency it will choose. A spokesperson at the bank declined to comment.
The market source said that Two Harbors is also preparing to bring its own RMBS deal later in the year. The real estate investment trust company noted in an end of year filing in 2012 that it had collected $335 million in residential mortgage loans or loan commitments. Bill Roth, co-chief investment officer, said then that the firm planned to pursue an RMBS deal "sooner rather than later," since spreads on the back of improving market conditions.
In October, last year Shellpoint Partners filed a shelf registration with the Securities and Exchange Commission and it is expected to issue RMBS pooling high-quality loans, just a notch below the pristine jumbo loans that have comprised Redwood Trust's Sequoia deals.
Laurie Goodman, senior managing director at Amherst Securities Group, L.P. said earlier this week at the American Securitization Forum’s annual securitization gathering in Las Vegas that she expects $25 billion to $30 billion in new origination RMBS, mostly from REITS and non-bank originators.
Redwood Trust has already issued two deal in the market this year and said late last year that it aimed to ramp up its non-agency loan production over 2013, with the goal of securitizing $300 million or more monthly.