International Financing Review September 8 2018 47STRUCTURED FINANCE
Fannie’s popular Connecticut Avenue
Securities credit-risk transfer (CRT) bond
programme got off the ground in 2013 and
lets investors take a stake in its large
portfolio of single-family home loans.
Fannie Mae and Freddie Mac currently
finance 60% of the residential mortgage
market through the issuance of
government-backed housing bonds.
CRT issuance, like the new multifamily
trade, helps cut taxpayer exposure if loans
they own sour.
Fannie and Freddie both are still under
government conservatorship since they
required a bail out in the wake of the
financial crisis.
“Reducing the overall risk to the taxpayer
is a big part of this,” Gross said.
The names of participating reinsurance
companies were not disclosed. But Gross
said that it was oversubscribed due to high
demand. “They were looking to do more
than we were looking to sell,” he said.
“That’s a positive sign of market
demand.”
The new credit risk deal, called Credit
Insurance Risk Transfer (CIRT) 2018-M01, is
expected to be yet another regular way that
Fannie sheds risk.
Different to the residential mortgage
market, multifamily lenders already hold
about one-third of the default risk of any
loan they sell to Fannie.
“We have been sharing risk with our
lenders for the whole 30 year history of our
business,” Gross said of its multifamily unit.The share of Fannie loans currently that
are 60 days past due - seriously delinquent -
is under 0.09%, he said.
Under Freddie and Fannie’s 2018
scorecard their multifamily purchase
volumes are each capped at US$35bn.
Loans in affordable and underserved
markets - a fast-growing part of the sector -
are excluded from those caps.
In addition to their sizeable investments
in home loans, Freddie and Fannie also have
upped their footprints in the multifamily
property markets since the financial crisis.
As of the first quarter, they provided
guarantees on 38% of the US$1.3trn total of
outstanding multifamily debt, according to
a Fannie fact sheet from August.
With an overall mandate to reduce its
mortgage footprint, Fannie expects to be in
the market with another CIRT insurance
policy deal later this year.
After that it expects to issue two to three
similar trades annually, Gross said.US MBS PRICINGSLONE STAR
LONE STAR priced a US$311.812m non-
qualified RMBS deal called COLT 2018-3.
Nomura was structurer and joint-bookrunner
along with Credit Suisse.
Largest tranche: Class A1 US$229.233m;
2.11-year WAL; rated Triple A; priced at
interpolated swaps plus 70bp.
For all other MBS pricings, please see
table. No ABS deals priced last week.ASIA-PACIFIC MBS
REDZED SETS RMBS GUIDANCEREDZED released price guidance for a
potential multi-tranche Australian dollar
RMBS, REDZED 2018-1.
The collateral consists of housing loans
secured by registered first-ranking mortgages
on residential property throughout Australia.
CBA is arranger and joint lead manager
with NAB.
For A$50m Class A1S notes with a 0.2-year
WAL price talk is one-month BBSW plus
85bp area.
For A$175m Class A1L and A$88.125m A2
notes, both with 2.4-year WALs, guidance is
one-month BBSW plus 140bp–145bp area
and 200bp area, respectively.
For A$32.25m Class B, A$6.375m Class C
and A$7.125m Class D notes, all with 3.7-
year WALs, price talk is one-month BBSW
plus 230bp–240bp area, low 300s and low
400s, respectively.
For A$6m Class E and A$3.375m Class F
notes, with 3.6 and 2.3-year WALs, guidance
is one-month BBSW plus low 600s and low
700s.
The A$3.375m Class G1 and A$3.375m
Class G2 notes have been retained.
RedZed Lending Solutions specialises in
lending to self-employed people and those
who self-certify their incomes.
It issued a A$250m non-conforming RMBS in
November 2017 via RedZed Series 2017-2 Trust.SSAR
US DOLLARS
Sep 5 2018 EIB US$3bn Dec 15 2021 2.875 99.993 MS-1 / T+15.85 2.878 MS+1 area,
MS flat area
US$6.2bn, >100acs Aaa/AAA/AAA Barc/Citi/RBC Amers 38%, EMEA 32%, APAC 30%. CB/
OI 61%, Tsy 26%, AM 13%.
EUROS
Sep 4 2018 Lower Saxony €750m Sep 12 2033 1.125 99.003 MS-4 / B+75.2 1.198 MS-2 area 0 >€1.1bn, >40 acs -/-/AAA Deka/DZ/Natx/NordLB/Uni Ger 62.7%, Fr 12.3%, UK 10.9%, Switz
4.5%, Benelux 3.5%, S.Eur 3%, RoEur
1.6%, Asia/EMEA 1.5%. Bks 36.9%, FM
55.4%, Ins 7.7%.
Sep 5 2018 KfW €1bn incr
(€5bn)
Mar 15 2023 0.375 101.972 MS-28 / B+24.7 -0.062 MS-28 area - - Aaa/AAA/Scope
AAABarc/DZ/NatWest -Sep 5 2018 NRW €250m
incr(€1.25bn)Feb 22 2038 1.65 104.02 MS+1 / B+67.2 1.412 MS+1 area - - Aa1/AA-/AAA BAML/DB/JPM/NordLB -Sep 6 2018 EIB (SAB) €500m May 15 2026 0.375 99.474 MS-20 / B+37 0.445 MS-18 area,
MS-19 area0 >€1.1bn, >50acs Aaa/AAA/AAA BAML/CA-CIB/CMZ/SEB/Uni Benelux 28%, Nordics 21%, Asia 18%,
Ger/Aus 13%, UK 13%, It 3%, Fr 3%,
Other 1%. Ins/PF 33%, Bks 33%, CB/OI
18%, FM 16%.
Sep 6 2018 Rentenbank €150m incr
(€2.25bn)Jun 12 2023 0.05 100.275 - -0.008 - - - Aaa/AAA/AAA BAML/Deka/Uni -SWISS FRANCS
Sep 3 2018 Kanton Basel-Stadt (Green) SFr230.885m Sep 24 2025 0 100.368 MS-14 / Eidg+28 -0.053 MS-14 (the #) 0 - -/AA+ KBBS -
NON CORE SSAR
Aug 30 2018 EIB SKr250m incr
(SKr3.25bn)May 12 2028 1.375 102.044 - - - - - Aaa/AAA/AAA SEB -Sep 3 2018 NWB A$25m incr
(A$1.025bn)Jul 17 2028 3.45 102.506 ASW+59 /
ACGB+64.753.152 - - - Aaa/AAA Miz -Sep 4 2018 AfDB SKr500m incr
(SKr1.373bn)Sep 21 2027 1.245 - - - - - - Aaa/AAA/AAA HCM -GLOBAL BOND SUMMARY DETAILS: WEEK ENDING 7/9/2018
Pricing date Issuer Amount Maturity Coupon (%) Reoffer Spread (bp) Yield (%) Pricing steps NIP (bp) Book size Ratings Bookrunners Distribution6 Bonds 2250 p25-55.indd 47 07/09/2018 19:30:01