HREMIC issuance for the first half of 2014 was $2.37 billion, with 12 transactions underwritten by 4 different sponsors. Bank of America Merrill Lynch continues its reign as market leader with a 43% market share, issuing a little over $1 billion of HREMICs. RBS was second with 3 issuances totaling $741.7 million, and Stifel was third with 3 transactions for $472.4 million. Nomura rounded out the pack with one transaction for $138.4 million.
First half issuance is roughly on pace with 2013 volume. For all of 2013, 6 underwriters sponsored 26 transactions for $4.9 billion. The record was 2012, when 31 transactions were issued for slightly more than $6 billion.
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.
