Archive for the ‘HREMIC’ Category

HREMIC Issuance First Half 2017: A Familiar Pattern

Tuesday, July 18th, 2017

HREMIC issuance for the first half of 2017 was $5.44 billion, eclipsing 2016’s first half issuance total of $5.43 billion, and on pace to set a fourth consecutive annual record. Second quarter volume was $2.53 billion, off 13% from the near record quarterly issuance of $2.91 billion set in 2017Q1.

There were 14 transactions underwritten by three sponsors, Nomura, Bank of America Merrill Lynch, and Citigroup. Nomura remains the #1 issuer, with $3.2 billion, Bank of America Merrill Lynch was second with $1.4 billion, and Citigroup was third with $853 million. Life-to-date BAML has issued $19.2 billion of all HREMICs for a 39% market share, and Nomura has issued $13.3 billion for a 27% market share.

Approximately 90% of outstanding HMBS securities have been resecuritized into HREMICs, up from 85% at the end of 2017Q1. At this point, substantially all HMBS are finding their way into HREMIC securitization. A stronger and broader bid for the Interest-Only HREMIC classes emerged last year, and as a result the HREMIC structure, which allows issuers to create bond classes such as these “IO” securities, has become the most profitable option.

HREMIC collateral consists of HMBS, which are Ginnie Mae guaranteed pass-through securities. HMBS are backed by pools of participations of HECMs, which are FHA-insured reverse mortgages. This double layer of government guarantee, combined with the relatively high coupon and favorable prepayment patterns of the underlying loans, results in very favorable execution, even when compared to other Ginnie Mae “forward mortgage” securities.

New View Advisors compiled these rankings from publicly available Ginnie Mae data.

HREMIC Issuance First Quarter 2017: Record Pace Continues

Tuesday, April 18th, 2017

HREMIC issuance for 2017Q1 was $2.91 billion, surpassing 2016’s first quarter issuance total of $2.84 billion, and on pace to set a third consecutive annual record. First quarter volume was just $89 million shy of the record quarterly issuance of $3.0 billion set in 2015Q4.

There were 8 transactions underwritten by three sponsors, Nomura, Bank of America Merrill Lynch, and Citigroup. Nomura remains the #1 issuer, with $1.7 billion, Bank of America Merrill Lynch was second with $756 million, and Citigroup was third with $453 million. Life-to-date BAML has issued $18.5 billion of all HREMICs for a 39% market share, and Nomura has issued $11.9 billion for a 25% market share.

Approximately 85% of outstanding HMBS securities have been resecuritized into HREMICs, up from 80% at the end of 2016. A stronger and broader bid for the Interest-Only HREMIC classes emerged, and the seasoned HMBS pools we’ve referenced in past blogs are also contributing to increased HREMIC volume. The HREMIC structure, which allows issuers to create bond classes such as these “IO” securities, is increasingly the most profitable option.

HREMIC collateral consists of HMBS, which are Ginnie Mae guaranteed pass-through securities. HMBS are backed by pools of participations of HECMs, which are FHA-insured reverse mortgages. This double layer of government guarantee, combined with the relatively high coupon and favorable prepayment patterns of the underlying loans, results in very favorable execution, even when compared to other Ginnie Mae “forward mortgage” securities.

New View Advisors compiled these rankings from publicly available Ginnie Mae data.

 

HREMIC Issuance Full Year 2016: Another Year, Another Record

Tuesday, January 3rd, 2017

HREMIC issuance for 2016 was $9.86 billion, surpassing 2015’s $9.51 billion, a previous record. There were 27 transactions underwritten by five sponsors, Nomura, Bank of America Merrill Lynch, Citicorp, Barclays, and RBC. Nomura remains the #1 issuer, with $5.4 billion, 54% of their life-to-date issuance of $10.1 billion. Bank of America Merrill Lynch was second with $3.2 billion. Life-to-date BAML has issued $17.8 billion of all HREMICs, for a 40% market share. Nomura has issued 23% of all HREMICs, and Barclays 13%.

Approximately 80% of outstanding HMBS securities have been resecuritized into HREMICs, up from 77% at the end of 2016Q3. A stronger bid for the Interest-Only HREMIC classes emerged in 2015, and the seasoned HMBS pools we’ve referenced in past blogs are also contributing to the HREMIC volume uptick. The HREMIC structure, which allows issuers to create bond classes such as these “IO” securities, is increasingly the most profitable option.

HREMIC collateral consists of HMBS, which are Ginnie Mae guaranteed pass-through securities. HMBS are backed by pools of participations of HECMs, which are FHA-insured reverse mortgages. This double layer of government guarantee, combined with the relatively high coupon and favorable prepayment patterns of the underlying loans, results in very favorable execution, even when compared to other Ginnie Mae “forward mortgage” securities.

New View Advisors compiled these rankings from publicly available Ginnie Mae data.

hremic-2016q4

HREMIC Issuance 2016Q3: On Pace For Record Volume (Again)

Monday, October 3rd, 2016

HREMIC issuance for the first 9 months of 2016 was nearly $7.7 billion, surpassing the first 9 months of 2015’s $6.5 billion, a previous record. The industry remains on pace to set its second consecutive annual issuance record. There have been 21 transactions underwritten by five sponsors, Nomura, Bank of America Merrill Lynch, Barclays, RBC, and Citicorp. Nomura remains the #1 issuer, with $4.5 billion, almost half their life-to-date issuance of $9.2 billion. Bank of America Merrill Lynch was second with $2.7 billion. Life-to-date BAML has issued $17.2 billion of HREMICs, for a 41% market share. Nomura has issued 22% of all HREMICs, and Barclays 14%. This is the first HREMIC transaction for Citicorp, bringing the number of current HREMIC issuers back to five for the first time since 2014.

Approximately 77% of outstanding HMBS securities have been resecuritized into HREMICs, up from 73% at the end of 2016Q2. A stronger bid for the Interest-Only HREMIC classes emerged last year, and the seasoned HMBS pools we’ve referenced in past blogs are also contributing to the HREMIC volume uptick. The HREMIC structure, which allows issuers to create bond classes such as these “IO” securities, is increasingly the most profitable option.

HREMIC collateral consists of HMBS, which are Ginnie Mae guaranteed pass-through securities. HMBS are backed by pools of participations of HECMs, which are FHA-insured reverse mortgages. This double layer of government guarantee, combined with the relatively high coupon and favorable prepayment patterns of the underlying loans, results in very favorable execution, even when compared to other Ginnie Mae “forward mortgage” securities.

New View Advisors compiled these rankings from publicly available Ginnie Mae data.hremic-issuer-rankings-2016q3

HREMIC Issuance 2016Q2: Nomura’s Run – and Increased Issuance Activity – Continues

Wednesday, July 6th, 2016

HREMIC issuance for the first 6 months of 2016 was $5.4 billion, surpassing the first 6 months of 2015’s $4.3 billion, a previous high water mark. The industry is on pace to set its second consecutive annual issuance record. There were 14 transactions underwritten by four sponsors, Nomura, Bank of America Merrill Lynch, Barclays, and Royal Bank of Canada. Nomura remains the #1 issuer, with $3.3 billion, nearly equaling their 2015 full year total of $3.4 billion. Bank of America Merrill Lynch was second with $1.8 billion. Life-to-date BAML has issued 41% of all HREMICs, Nomura 20%, and Barclays 15%. This is the first HREMIC transaction for RBC.

Approximately 73% of outstanding HMBS securities have been resecuritized into HREMICs, up from 64% at the end of 2015. A stronger bid for the Interest-Only HREMIC classes emerged last year, and the seasoned HMBS pools we’ve referenced in past blogs are also contributing to the HREMIC volume uptick. The HREMIC structure, which allows issuers to create bond classes such as these “IO” securities, is increasingly the most profitable option.

HREMIC collateral consists of HMBS, which are Ginnie Mae guaranteed pass-through securities. HMBS are backed by pools of participations of HECMs, which are FHA-insured reverse mortgages. This double layer of government guarantee, combined with the relatively high coupon and favorable prepayment patterns of the underlying loans, results in very favorable execution, even when compared to other Ginnie Mae “forward mortgage” securities.

New View Advisors compiled these rankings from publicly available Ginnie Mae data.

HREMIC Issuance 2015 Full Year – Nomura Keeps the Crown in Record Year

Tuesday, January 5th, 2016

HREMIC issuance for all of 2015 was just over $9.5 billion, easily surpassing 2014’s $5 billion of issuance and the previous full year record of $6 billion set in 2012. There were 33 transactions underwritten by four sponsors, Nomura, Bank of America Merrill Lynch, Barclays, and Credit Suisse. Nomura remains the #1 issuer for the year, with $3.4 billion, Bank of America Merrill Lynch was second with $2.9 billion, and Barclays pushed ahead to third with 6 issuances totaling $1.8 billion. Credit Suisse rounded out the group with $1.4 billion issued for a 9% market share. Life-to-date BAML has issued 42% of all HREMICs, Barclays 17%, and Nomura 14%.

Approximately 64% of outstanding HMBS securities have been resecuritized into HREMICs, up from 60% at the end of the third quarter.  A stronger bid for the Interest-Only HREMIC classes emerged this year.  The HREMIC structure, which allows issuers to create bond classes such as these “IO” securities, is increasingly the most profitable option.

HREMIC collateral consists of HMBS, which are Ginnie Mae guaranteed pass-through securities. HMBS are backed by pools of participations of HECMs, which are FHA-insured reverse mortgages. This double layer of government guarantee, combined with the relatively high coupon and favorable prepayment patterns of the underlying loans, results in very favorable execution, even when compared to other Ginnie Mae “forward mortgage” securities.

New View Advisors compiled these rankings from publicly available Ginnie Mae data.

 

HREMIC Issuance 2015 First 9 months – Already in the Record Books

Monday, October 5th, 2015

HREMIC issuance for the first nine months of 2015 was $6.5 billion, easily surpassing 2014’s full year $5 billion of issuance, and the previous full year record of $6 billion set in 2012.  There were 23 transactions underwritten by four sponsors, Nomura, Bank of America Merrill Lynch, Credit Suisse and Barclays. Nomura remains the #1 issuer for the first nine months, with $2.4 billion, Bank of America Merrill Lynch was second with $2.2 billion, and Credit Suisse was third with 6 issuances totaling $1.3 billion, though CS issued no new securities in the third quarter.  Barclays rounded out the group with $611 million issued through three transactions for a 9% market share.  Life-to-date BAML has issued 44% of all HREMICs, Barclays 14%, and Nomura 12%.

Approximately 60% of outstanding HMBS securities have now been resecuritized into HREMICs.

HREMIC collateral consists of HMBS, which are Ginnie Mae guaranteed pass-through securities.  HMBS are backed by pools of participations of HECMs, which are FHA-insured reverse mortgages.  This double layer of government guarantee, combined with the relatively high coupon and favorable prepayment patterns of the underlying loans, results in very favorable execution, even when compared to other Ginnie Mae “forward mortgage” securities.

New View Advisors compiled these rankings from publicly available Ginnie Mae data.

HREMIC Issuance 2015 First Half – Nomura Eclipses BAML for #1

Wednesday, July 1st, 2015

HREMIC issuance for the first six months of 2015 was $4.27 billion, 85% of 2014’s full year $5.05 billion.  There were 15 transactions underwritten by three sponsors, Nomura, Bank of America Merrill Lynch, and Credit Suisse. Nomura captured the #1 slot for the first half, ending Bank of America Merrill Lynch’s nearly 6-year reign as #1 by just $16 million in the half.  Nonetheless, life-to-date BAML has issued 45% of all HREMICs, while Nomura has issued 9% life-to-date.  Credit Suisse was the third underwriter with 6 issuances totaling $1.33 billion.  Credit Suisse has issued a little less than 6% of all HREMICs life-to-date.

Issuance in 2015 is on pace to smash through 2012’s record $6 billion of HREMIC issuance.  BAML’s $730 million 2015-H13 transaction was the largest HREMIC ever issued.  Approximately 57% of all HMBS have now been resecuritized into HREMICs.  While there have been a total of 14 different HREMIC issuers since 2009, with RBS dropping out of the business, this is the first time just 3 dealers represented 100% of HREMIC issuance.

HREMIC collateral consists of HMBS, which are Ginnie Mae guaranteed pass-through securities.  HMBS are backed by pools of participations of HECMs, which are FHA-insured reverse mortgages.  This double layer of government guarantee, combined with the relatively high coupon and favorable prepayment patterns of the underlying loans, results in very favorable execution, even when compared to other Ginnie Mae “forward mortgage” securities.

New View Advisors compiled these rankings from publicly available Ginnie Mae data.

HREMIC Issuance – 2014 Full Year

Tuesday, January 6th, 2015

HREMIC issuance ended 2014 at $5.05 billion, with 25 transactions underwritten by 5 different sponsors. Bank of America Merrill Lynch remains the market leader with a 39% market share, issuing $1.96 billion of HREMICs. Life to date, BAML has issued 47% of all HREMICs. RBS was second with 6 issuances totaling $1.46 billion, and Nomura was third with 5 transactions for $856 million.

Issuance in 2014 reached the third highest annual volume after 2012 and 2010. Volume surpassed 2013 totals by just under $100 million but was far off the record year in 2012 when $6 billion was issued. Stifel issued $472 million in 2014, but none in the second half. Credit Suisse is a new HREMIC issuer as of November 2014, with one transaction issued for $295 million.

HREMIC collateral consists of HMBS, which are Ginnie Mae guaranteed pass-through securities. HMBS are backed by pools of participations of HECMs, which are FHA-insured reverse mortgages. This double layer of government guarantee, combined with the relatively high coupon and favorable prepayment patterns of the underlying loans, results in very favorable execution, even when compared to other Ginnie Mae “forward mortgage” securities.

New View Advisors compiled these rankings from publicly available Ginnie Mae data.

HREMIC 2014 First 9 Months – Where Have All the Sponsors Gone?

Wednesday, October 1st, 2014

HREMIC issuance for the first 9 months of 2014 was $3.75 billion, with 19 transactions underwritten by 4 different sponsors.  Bank of America Merrill Lynch remains the market leader with a 44% market share, issuing a little over $1.6 billion of HREMICs, $630.3 million of which was in the third quarter.  RBS was second with 4 issuances totaling $932.6 million, and Nomura was third with 4 transactions for $693.3 million.  Nomura issued $557.9 million of HREMICs in the third quarter; Stifel issued none.

Issuance remains on pace with 2013, but the bigger story is fewer sponsors. BAML and Nomura were responsible for 86% of third quarter activity, with RBS issuing just one HREMIC for $190.8 million.  Cantor Fitzgerald last issued HREMICs in 2011, Deutsche Bank in 2012, and Barclays in 2013.  With Stifel’s likely departure from reverse mortgages last month, and Knight Capital’s exit last year, the industry is down to just three HREMIC sponsors, BAML, Nomura, and RBS.

HREMIC collateral consists of HMBS, which are Ginnie Mae guaranteed pass-through securities.  HMBS are backed by pools of participations of HECMs, which are FHA-insured reverse mortgages.  This double layer of government guarantee, combined with the relatively high coupon and favorable prepayment patterns of the underlying loans, results in very favorable execution, even when compared to other Ginnie Mae “forward mortgage” securities.

New View Advisors compiled these rankings from publicly available Ginnie Mae data.