The securitization of prime mortgages into bonds is well established in New Zealand, and now the sector for non-conforming mortgages is starting to see similar levels of growth, market participants say.
Thursday, June 24th 2004, 7:25AM
by The Landlord
Non-conforming mortgages are those that don't have the high level of documentation and income history which make prime mortgages so attractive for investors.
The market for non-conforming mortgage-backed bonds has tightened in the past eight months with a contraction in the spread at which the AAA tranche of floating-rate non-conforming mortgage-backed securities trades over the three-month bank bill rate.
Last week, Sapphire Securities, which securitizes non-conforming mortgages originated by Bluestone New Zealand, became the first issuer of bonds backed by non-conforming mortgages originated in New Zealand.
