Pacific Investment Management Co. (PIMCO) raised more than its targeted $1.5 billion to buy assets from banks looking to strengthen their balance sheets, according to a Bloomberg report.
PIMCO's Bank Recapitalization and Value Opportunities fund purchases debt such as troubled commercial and residential mortgages. It might also invest directly in banks via securities that include warrants and convertible debt, said the report, which noted that the fund could grow to $2 billion to $3 billion in total before it is closed.
Just two Jumbo mortgage securitizations have come to market over the past 10 months. Both were issued by Redwood Trust.
Various securitization market players have said that, as the dust settles on Dodd-Frank financial regulations, it is likely that some of the functions that have been concentrated in the banking system will start to move away from these financial institutions. These firms, through Dodd-Frank and Basel 3, are required to hold increased capital for holding loan securities.