The current standard language in leveraged loan documents may expose issuers to heightened credit risk and a spike in debt service costs when LIBOR is no longer viable, according to Fitch Ratings.
The Fannie/Freddie JV in charge of the uniform MBS has a new CEO with a deep background in mortgage finance: Anthony Renzi. In early 2018, he was hired to run the day-to-day operations of Cenlar, the big kahuna of subservicing.
The novelty of prepayment as a primary risk factor is one of the charms MBS have for foreign investors, particularly sophisticated institutional investors. That’s because it has a relatively low correlation factor with other assets.
Industry MBS holdings rose 3.6% to $1.98 trillion as of the end of September, with most of the gains coming in agency pass-throughs. Wells, Chase, BB&T and Citi all posted big gains, BofA not so much. (Includes two data charts.)
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