Federal forbearance on government backed mortgages is a panacea to deal with the economic fall-out caused by the novel coronavirus. But eventually there will be implications in the primary and secondary markets.
The Federal Reserve's revived MBS purchase program will likely absorb half of new monthly issuance, crowding out other investors that have carried the market for the past two years. (Includes two data charts.)
Industry-wide holdings of residential MBS were steady in the fourth quarter, but several REITs shifted their focus to non-agency MBS and other investments. (Includes data chart.)
Foreign investors boosted their holdings of U.S. agency MBS by 13.4% from June 2018 to the middle of last year, with big gains posted by Japan and China. (Includes data chart.)
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.
Some SWFs in other countries have extensive ownership interests in major corporations and sweep much of their profits into state coffers.
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