Ghana Home Loans, the nation’s leading provider of residential mortgages, has announced its intention to play a pioneering role in the creation of a local mortgage-backed securities market.
Securitisation refers to the process by which an
issuer, such as Ghana Home Loans, raises funds by offering securities to
investors, using a pool of future receivables as collateral.
In particular, mortgage-backed securitisation
(MBS) is the issuance of securities that are collateralised by future mortgage
payments. The monthly mortgages payments made by homeowners are aggregated by
the issuer and used to pay investors in the MBS for a pre-agreed duration.
Investors in this asset class are typically
pension funds, insurance companies, High NetWorth Individuals, and other
institutions with long-term investment horizons and an ability to assess the
credit-quality of the issuance.
Mortgage-backed securities allow issuers to diversify their financing
sources by offering alternatives to more traditional forms of debt and equity
financing. In the US alone, the mortgaged-backed
securities market is valued in excess of US$8.5trillion.
Ghana Home Loans will organise a stakeholders’
seminar in Accra later this month to finalise its preparations toward the
issuance of the first set of mortgage-backed securities. In attendance will be representatives from
regulatory bodies, international investment banks and law firms, pension fund
managers, regulators and accounting firms.
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