The U.S. Department of Housing and Urban Development has begun the process on helping China establish a secondary mortgage market to ultimately securitize residential mortgages. HUD and China's Ministry of Construction have targeted the end of the year for the launch of the pilot project.
The Federal Home Loan Banks of Indianapolis, Cincinnati and Seattle are jointly developing a new secondary market mortgage program. Currently being called the Mortgage Purchase Program, the program has a regional focus and a unique risk-sharing plan, making it distinct from the Mortgage Partnership Finance program in which eight other FHLBanks participate. The program, which has four layers of credit protection, is expected to be tested sometime during the third quarter.
Hawk Holdings LLC, the strategic alliance formed between Qwest Communications International Inc. and Baxter Investments LLC, has entered into the fixed-income securities market through an investment in MBSAuction LLC. MBSAuction will allow buy-side and sell-side firms to interact and trade securities over its Internet platform in real time. The goal is to increase transparency, liquidity and lower transaction costs. Lehman Brothers' former vice president of mortgage trading, Greg Meyer, has been selected as MBSAuction's chief executive officer.
CapitalEngine.com, a full-service online investment bank, is rumored to be expanding into online commercial mortgage-backed securities trading in the near future. CapitalEngine.com is an Internet-based real estate investment bank that connects commercial real estate borrowers with sources of debt and equity capital in a more efficient manner than traditionally possible.
Fannie Mae will launch new 10-year Benchmark Notes at a minimum of $3 billion. While the launch date has not been set, they are scheduled to price June 7 with settlement June 9. The notes have a maturity date of June 7, 2010. Bear Stearns & Co., Credit Suisse First Boston, and J.P. Morgan Securities are the joint leads on the deal.
Pittsburgh, Pa.-based Federated Investors Inc. has taken on a $500 million mortgage-backed collateralized bond obligation. The portfolio will be managed by Edward Tiedge and Randall Bauer, both vice presidents and senior portfolio managers. This is the first mortgage-backed CBO in the firm's history, and the transaction was placed by Lehman Brothers.