A growing list of mortgage lenders is holding off on offerings of bonds backed by home and commercial-property loans as investors demand more compensation to take on the risk amid turbulence in rates markets.
Figure Technology Solutions Inc. was the latest to put a break on fundraising plans. A firm unit has decided to postpone a $346 million residential mortgage-backed security that it had initially planned to price on Thursday, after struggling to attract sufficient investor demand, according to people familiar with the matter.
The move comes just a few days after Freddie Mac delayed the sale of more than $440 million of bonds tied to apartment-building mortgages and Bridge Investment Group shelved a $1.19 billion commercial real estate collateralized loan obligations offering. Investors are demanding juicier returns to take on mortgage risk as Treasury yields surge and higher financing costs fuel concerns about borrowers’ ability to keep up with payments.
New York-based Figure provides revolving credit lines secured by homes. Its offering was backed by a pool of 4,101 mortgage loans maturing in as much as 30 years. The largest portion of the deal — a AAA rated $256.3 million tranche — was being offered at a spread of about 1.55 percentage points over the benchmark.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing