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Volume 2014 - Number 28

July 18, 2014

Issuance of Re-REMICs on the Rise in 2014, Deals Are Offering Enhanced Returns Compared with Vintage Non-Agency MBS

Re-securitization activity is above levels seen last year because of compressed yields on vintage non-agency MBS, according to industry analysts. Re-securitizations – all of which are privately placed and typically without a rating – can offer investors more credit risk and leverage than vintage non-agency MBS. In the first half of 2014, 20 re-securitizations of real estate mortgage investment conduits totaling $5.90 billion were issued, according to Bank of America Merrill Lynch. Activity is picking up: June alone accounted for 28.3 percent of the issuance. “In an environment where yields have compressed in the vintage non-agency space, subordinate re-REMIC classes can offer...

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This weekly covers the secondary mortgage market, including mortgage-backed securities and asset-backed securities.

 

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