Agency will not provide guarantee to one tranche after receiving AAA rating
The Hong Kong Mortgage Corp, a government-owned agency to promote the home loan market, said it will sell HK$2 billion of mortgage-backed securities, including a tranche in which it does not provide guarantees for the first time.
The sale will be divided into two tranches, including a HK$1.74 billion portion that is not guaranteed by the HKMC after receiving an AAA rating from Moody's Investors Service and Standard & Poor's.
That unguaranteed tranche carries maturity ranging from one to five years with a coupon rate of between 4.07 per cent and 4.28 per cent per annum.
'With its high credit standing, the HKMC is well-positioned to play a more active and strategic role in promoting the development of the debt and securitisation markets in Hong Kong,' HKMC executive director Peter Pang Sing-tong said.
The second tranche of HK$260 million worth of subordinated notes carry a floating coupon rate of 0.18 per cent above Hong Kong's interbank rate with an expected average life of 6.05 years. It is guaranteed by the HKMC.
Together with the latest sale, the HKMC said it has sponsored a total of HK$13.2 billion in mortgage-backed securities since it began securitisation in 1999, accounting for about a quarter of Hong Kong's market over the past 10 years.