HMBS Issuer 2015 Third Quarter League Tables – The Song Remains the Same

For the nine months ended September 2015, AAG kept its #1 HMBS Issuer title, with second place RMS just $102 million behind. There was no ranking movement among issuers from June, although Silvergate Bank did issue one pool, raising the total number of HMBS issuers to 13, the historical high watermark for issuer count. AAG issued $1.347 billion of securities for a 20.0% market share, RMS issued $1.245 billion for an 18.5% market share, and Urban Financial issued $1.236 billion for an 18.3% market share. RMF and Liberty rounded out the Top-5 issuers with $974 million and $804 million respectively. The Top-5 issuers accounted for more than 83% of all issuance, down just slightly from last quarter’s 84%.

HMBS Issuers sold a total of $6.7 billion through three quarters, more than all of 2014’s $6.6 billion, though monthly HMBS volume has been declining since May of this year. The all-time record for annual HMBS issuance is 2010’s $10.7 billion.

HMBS Rankings

HREMIC Issuance 2015 First 9 months – Already in the Record Books
HREMIC issuance for the first nine months of 2015 was $6.5 billion, easily surpassing 2014’s full year $5 billion of issuance, and the previous full year record of $6 billion set in 2012. There were 23 transactions underwritten by four sponsors, Nomura, Bank of America Merrill Lynch, Credit Suisse and Barclays.

Nomura remains the #1 issuer for the first nine months, with $2.4 billion, Bank of America Merrill Lynch was second with $2.2 billion, and Credit Suisse was third with 6 issuances totaling $1.3 billion, though CS issued no new securities in the third quarter. Barclays rounded out the group with $611 million issued through three transactions for a 9% market share. Life-to-date BAML has issued 44% of all HREMICs, Barclays 14%, and Nomura 12%.

Approximately 60% of outstanding HMBS securities have now been resecuritized into HREMICs.
HREMIC collateral consists of HMBS, which are Ginnie Mae guaranteed pass-through securities. HMBS are backed by pools of participations of HECMs, which are FHA-insured reverse mortgages. This double layer of government guarantee, combined with the relatively high coupon and favorable prepayment patterns of the underlying loans, results in very favorable execution, even when compared to other Ginnie Mae “forward mortgage” securities.

HREMICs 2015Q3
(Note: The following was published by New View Advisors, which compiled these rankings from publicly available Ginnie Mae data.)