Nomura Securities is said to have muscled away a victory Tuesday on a highly bid pool of legacy mortgage bonds just days after placing three of its mortgage traders on leave.
The U.S. unit of the Japanese securities firm won a $753 million bid list of residential mortgage-backed securities sold at an “all or none” auction on Tuesday afternoon, according to two people outside of the transaction.
The paper included a strong proportion of adjustable-rate collateral, most of which was originated prior to the financial crisis, according to Empirasign data. Some of that issuance included originations from the former GMAC Mortgage, analytics provider Interactive Data show.
Nomura spokeswoman Jennifer Will declined to comment on the transaction.
Market chatter lit up Tuesday afternoon with talk about the Nomura participation. The firm may be trying to signal to the market that its operations have not been halted by recent internal actions, outside traders speculated.
Three mortgage securities traders at Nomura’s New York offices were said to be placed on leave starting last week, Bloomberg News reported a week ago. The actions come amid internal probes by Wall Street firms in response to a government crackdown on fraudulent mortgage trading following the successful conviction of Jefferies Group trader Jesse Litvak.
Elsewhere in the secondary market, Fortress Investment Group-owned REIT New Residential Investment Corp is said to have been behind the even larger, $1.3 billion RMBS list sold at ten o’clock a.m. Tuesday.
Buyers pushed back against aggressive pricing for the 112 line items of mostly subprime paper, said Empirasign data president Adam Murphy. At least 50% of the Fortress list received “Did-Not-Trades” from bids wanted in competition. The sale may have been meant as a “pricing exercise,” one broker said, requesting not to be named because of client involvement.