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Investec successfully places a further R1.6bn RMBS

Posted On Tuesday, 20 November 2007 02:00 Published by
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Private Residential Mortgages has been successfully placed by Investec as part of its R20 billion Residential Mortgage-Backed Securitisation Programme

Private Residential Mortgages (Pty) Ltd Series 2, amounting to R1.6 billion, has been successfully placed by Investec as part of its R20 billion Residential Mortgage-Backed Securitisation Programme.

The issue was again over-subscribed with total bids reaching R2.2 billion.

Since its first securitisation Private Mortgages 1 (Pty) Ltd in 2002, Investec has securitised 32.45% of its residential book to date.

"Because we lend primarily to high net worth individuals, our borrower base is unlikely to default," said Marianna Papadopoulos, from Investec's Capital Markets team.

"Hence, our reputation in the market as an established RMBS issuer with a proven track record, the excellent performance of our assets and their high credit quality as well as our robust legal structures all contributed to the success of this transaction, particularly notable in current market conditions."

The issue comprising both fixed- and floating-rate notes offered four classes of notes, namely A, B, C and D with three-and five-year maturities and priced at 45 and 55 basis points above JIBAR (Johannesburg Interbank Acceptance Rate), respectively. The final maturity date is 15 December 2035.

All the notes have been listed on the Bond Exchange of South Africa. The issue backed newly originated assets and also refinanced the existing assets under Private Mortgages 2 (Pty) Ltd.

This refinancing catered for the redemption of Private Mortgages 2 on 15 November 2007, the
scheduled maturity for this transaction.

The issue, as did last year's Private Residential Mortgages Series 1, also catered for the securitisation of jumbo loans (between R3 million and R5 million).

"We are insulated from the concerns around the sub-prime market," said Papadopoulos, "However, South Africa's rising interest rates, the lack of a secondary market trading in securitisation and increased supply versus demand for securitisation paper combine to mean more challenging conditions for securitisations in general.

Nevertheless, we see it as a testament to the quality of our transaction that we placed our notes successfully with 12 institutions participating in the issue."

I-Net Bridge

Publisher: I-Net Bridge
Source: I-Net Bridge
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