Nhb May Launch Maiden Mortgage Issue On August Eighteen

The Rs 100-crore issue was deferred after the Reserve Bank of India hiked interest rates on July 21. The issue had been postponed due to high level of volatility in the money markets after the interest rate hikes.

According to merchant bankers, the float is likely to be launched on August 18. The bonds are rated AAA and will be priced at a spread of around 25-50 basis points above the government securities of equivalent tenure.

"Since the bonds have an average maturity of around four years and 11 months, they are likely to be priced in comparison to the current yield on the five-year government bonds," said a merchant banker. The lead managers to the issue are SBI Capital Markets and ICICI Securities.

 

The current yield on the five-year government paper in the market is around 11 per cent and therefore the coupon is likely to be around 11.50 per cent or slightly above that.

The issue consists of securitisation of housing loans of Housing Development Finance Corporation and LIC Housing. While the HDFC loans amounting to around Rs 60 crore had been assigned a return of 10.8 per cent,

LIC Housing's paper was to earn around 10.9 per cent.

Merchant bankers said that the response to the issue was strong last month just before the launch date and there had been a strong possibility that the issue would be oversubscribed.

In the second issue, NHB is to securitise loans worth Rs 100 crore of Dewan Housing Finance and Canfin Homes.