NIBC Bank of the Netherlands is marketing its first offering in five years of bonds backed by mortgages it originated for Dutch homeowners.
The €476.2 million Dutch MBS XIX B.V. is collateralized by 2,502 loans with an average balance of €190,327 and weighted average seasoning of 4.09 years. The average loan age is nearly as long a period as the gap between NIBC’s current transaction and its Dutch MBS XVIII deal that closed in February 2013.
NIBC, which has €22 billion assets, is owned by a consortium of investors led by New York investment firm J.C. Flowers & Co. It has just a 1% market share of mortgage origination in the Netherlands and is a much less frequent issuer of mortgage bonds than some of other Dutch prime mortgage lenders like Rabobank, which (
But the credit quality of NIBC's mortgage bonds is comparable to those of other issuers, according to a Moody's Investors Service. The pool of loans for this transaction has a lower weighted average interest rate (3.09%) than other originators, and all the loans are current. Over 85% of the loans have never been delinquent, according to the report report.
The current loan-to-value ratio of the loans is 79.7%, lower than the range of 83.8%-98.4% for loans securitized by Obvion since 2016. More than 41% of the Dutch MBS XIX loans are interest-only loans, which is typical of Dutch prime RMBS deals.
Nearly all the loans (99.2%) are fixed-rate and 32.3% were sold under the Netherlands’ mortgage guarantee program, Nationale Hypotheek Garantie, which provides financial backing to qualified borrowers during hardship periods.
Moody’s expects losses to reach 0.7% of the original principal balance over the life of the transaction; that's also in line with the performance of prime mortgage bonds issued by other Dutch lenders.
Five classes of notes will be issued in the transaction. including a €447.3 million tranche of Class A notes with preliminary triple A ratings from Moody’s and Fitch Ratings.
