Fannie Mae to roadshow its debut "risk-sharing" mortgage bond
NEW YORK, Sept 12 (IFR) - Government-supported mortgage giant Fannie Mae will begin marketing its debut "risk-sharing" mortgage-backed security (MBS) over the next two weeks, according to three investors that have been briefed on the deal and one investment banker.
The transaction will closely mirror a similar inaugural US$500 million deal issued by sister agency Freddie Mac in July, known as the Structured Agency Credit Risk (STACR) bond.
The purpose of this new class of so-called "risk-sharing" MBS from the GSEs is to sell off some of the default risk of their residential mortgage holdings to private investors willing to gamble on their pool of loans.
The new bond programs come after the Federal Housing Finance Agency (FHFA), a government regulator, directed both GSEs to share out the risk on US$30 billion each of their loan portfolios, as part of a wider initiative to minimize their vast footprint in the US residential mortgage industry.
Bank of America will be lead underwriter on the Fannie Mae deal, but Credit Suisse, which led Freddie Mac's STACR offering, will be heavily involved in the transaction as well.
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