HKMC closes HK$3bn Bauhinia MBS

Mortgage Corp hopes record MBS deal will help develop Hong Kong securitization market.

Hong Kong Mortgage Corporation's second offer from the Bauhinia mortgage-backed securities programme has closed and the bonds will be issued on November 4. The HK$3 billion $387 million issue, lead managed by HSBC, is Hong Kong's largest residential mortgage securitization to date.

The notes are offered in three tranches of HK$1 billion each, are backed by a pool of 2,520 residential mortgages and are fully guaranteed by HKMC, which means they qualify for 20% capital risk weighting, rather than the 50% weighting for mortgage loans. HKMC is rated Aa3 by Moody's and AA- by Standard Poor's.

An innovative bond-style structure is designed to give the deal...

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