Nhbs Mortgage-Backed Issue Sails Through

The National Housing Board (NHB) said its issue of mortgage-backed securities (MBS) comprising 4,526 mortgages of Rs 85.35 crore originated by Canfin Homes Ltd has been fully subscribed today well ahead of the June 28 deadline.

"Due to the overwhelming response of investors in the issue, the demand of many investors could not be fully satisfied due to the limited issue size of Rs 58.19 crore," NHB said in a statement today.

The deal size, which has a total tenure of 82 months and average tenure of 42 months, was fully subscribed by a wide range of institutional investors at a coupon of 8.9 per cent per annum.

With this issue, NHB has completed securitisation of five pools involving housing loan assets aggregating Rs 360 crore, the statement added.

Pursuant to the Credit Policy announcement of April 2002, the Reserve Bank of India (RBI) has issued guidelines for investments by banks in MBS.

The RBI guidelines say that investments by banks in MBS issued by the housing finance companies, recognised and supervised by the NHB, will be considered for inclusion in the housing finance allocation of 3 per cent and also assignment of risk weight of 50 per cent for the purpose of capital adequacy.