AHML Reaches Record Volumes in Market of Mortgage-Backed Securities
OREANDA-NEWS. In 2014, the Agency for Housing Mortgage Lending gave a record amount of support to the secondary mortgage market.
Last year one of the key activities of AHML was the support of transactions on the mortgage securitization, including through development of a multi-originator platform, implementation of programmes for the purchase of mortgage-backed securities of market participants, provision of guarantees for mortgage-backed securities, and development of infrastructure services in the market of mortgage-backed securities, as well as issue of its own MBS.
In 2014, 28 transactions on the issue of mortgage-backed bonds were concluded in the market. The volume of the mortgage portfolios securitization amounted to 252.8 billion roubles. The results exceeded those of 2013 by 64%. According to preliminary data, the share of securitized mortgage loans in the total volume of mortgage issuance amounted to about 14.5% in 2014 - the highest result since 2009. In 2013, this share was 11 percent.
The share of MBS issues of AHML and other participants that placed bonds with the support of the Agency amounted to about 70% of the total volume of transactions in 2014 as compared to 30% in the previous year. At the same time, AHML's own transactions amounted to only 10% in this volume . Direct investment of the Agency in the purchase of mortgage-backed bonds amounted to 23.2 billion roubles in 2014 .
The Programme for purchase of mortgage-backed bonds for the sole and multi-originator transactions allows to get guaranteed liquidity in AHML in accordance with the prefixed profitability, including on the pool accumulation. In 2014, banks used this guarantee in the amount of 22.1 billion roubles. As part of the Programme, the Agency also provided bridge financing for the mortgage pools accumulation in the total amount of 12.7 billion roubles. In addition, in 2014 AHML concluded new contracts for the purchase of mortgage-backed bonds in 2015-2016 in the amount of 66.8 billion roubles, about a third of them were a part of the multi-originator platform established in AHML.
In 2014, AHML acted as the guarantor for mortgage-backed bonds in transactions totalling 73.7 billion roubles. In autumn the Agency started to provide guarantee for bonds the issuers of which are not only mortgage agents, but also direct lenders as well. This allowed not only for medium and small banks, but also for major state-owned banks subject to the sanctions to issue MBS in accordance with the requirements of the majority of investment declarations and the Lombard list and the criteria of Program of Vnesheconombank's investments in affordable housing construction and mortgage lending projects.
In 2014, AHML actively developed infrastructure services in the market of mortgage-backed bonds. So, the volume of transactions of market player, where AHML acted as the primary or backup servicer, amounted to 44.53 billion roubles. AHML provided services of the settlement agent and organizer in the transactions in the amount of 34.5 billion roubles.
Last year, AHML offered to the market another tool of credit support for the issue of mortgage-backed bonds - mortgage insurance. AHML Insurance company provided insurance coverage against credit losses on mortgage coverage to three issues of MBS totalling 16.7 billion roubles. Mortgage insurance can significantly enhance investor's confidence and improve the efficiency of the securitization transaction - the amount of junior tranches of bonds was reduced by 40-50% while maintaining the same reliability of the senior ones. Due to this new financial instrument, banks-originators could significantly increase the volume of issue of marketable bonds and at the same time increase the anticipated (residual) yield on the junior tranches.
"In 2014, AHML focused its efforts on the programme for support of securitization of mortgage portfolios for banks and companies - the primary mortgage lenders. We have managed to reach record high results due to the stable presence of different programmes of AHML on the MBS market, a quick response of the Agency to the imposition of sanctions against a number of Russian financial institutions, as well as the active participation of AHML in the improvement of legislation and regulatory frameworks. In 2015, the development of the mortgage securities market will remain one of the strategic priorities of the Agency", says Natalia Koltsova, Executive Director, Head of the AHML Capital Division.
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