Hong Kong Mortgage Corporation's second offer from the Bauhinia mortgage-backed securities programme has closed and the bonds will be issued on November 4. The HK$3 billion $387 million issue, lead managed by HSBC, is Hong Kong's largest residential mortgage securitization to date.
The notes are offered in three tranches of HK$1 billion each, are backed by a pool of 2,520 residential mortgages and are fully guaranteed by HKMC, which means they qualify for 20% capital risk weighting, rather than the 50% weighting for mortgage loans. HKMC is rated Aa3 by Moody's and AA- by Standard Poor's.
An innovative bond-style structure is designed to give the deal...
