Tags: wells fargo | post | crisis | mortgage | bond

Wells Fargo Planning Its First Post-Crisis Mortgage Bond

ells fargo logo sign in red and yellow outside a branch
(Robwilson39/Dreamstime)

Friday, 05 October 2018 09:52 AM

Wells Fargo & Co. is planning its first post-crisis offering of bonds tied to U.S. home loans without government backing, according to people familiar with the matter.

The $441 million non-agency bond will include top portions, which will be rated AAA, said the people, who asked not to be identified citing lack of authorization to speak publicly. The sale will be finalized next week.

Wells Fargo Chief Executive Officer Tim Sloan hinted over a year ago that the lender planned to originate a non-agency securitized mortgage offering in the near future and help kick start the market, which cratered in 2008.

“The next-generation of private-label RMBS credit generally has been hard to source, given the sparse participation by originators and banks,' said Neil Aggarwal, senior portfolio manager and head of trading at Semper Capital. “Wells Fargo entering the market will likely be welcomed by investors as it is another potential source for this type of paper.'

Wells Fargo (WFC) was one of the top issuers of private-label residential mortgage-backed securities in the run-up to the financial crisis. More than $1 trillion of mortgage bonds without government backing were issued in 2005 and 2006 each, according to Sifma.

Issuance of private-label RMBS has hit a post-crisis high of $75 billion this year, with no signs of slowing down due to heavy investor demand for non-qualified mortgage (non-QM) transactions. These deals can include non-prime or non-standard loans.

Wells Fargo’s re-entry into the market was widely anticipated and is considered a positive for the redevelopment of the private-label RMBS market. JPMorgan Chase & Co. is the only other large pre-crisis lender to reenter the market, when it started issuing RMBS in 2013.

© Copyright 2018 Bloomberg News. All rights reserved.

   
1Like our page
2Share
Personal-Finance
Wells Fargo & Co. is planning its first post-crisis offering of bonds tied to U.S. home loans without government backing, according to people familiar with the matter.
wells fargo, post, crisis, mortgage, bond
279
2018-52-05
Friday, 05 October 2018 09:52 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved