WinWater Home Mortgage LLC, a buyer of the loans affiliated with former Deutsche Bank AG banker Neil Ahuja’s Premium Point Investments LP hedge fund, is planning its first sale of bonds without government backing, according to a person with knowledge of the deal.
WinWater hired JPMorgan Chase & Co. (JPM) and Bank of America Corp. (BAC) to market the $249 million transaction tied to prime jumbo U.S. mortgages, said the person, who asked not to be named because the offering is private. The company intends to become a regular issuer of the debt, the person said.
The firm was created last year by “certain principals” of Premium Point, according to its website, which lists Hyung Peak, a Premium Point official, as WinWater’s managing partner. Ahuja headed Deutsche Bank’s residential mortgage-backed securities business through 2008. Kris Kagel, a spokesman for WinWater at Jennifer Connelly Public Relations, declined to comment on the planned bond sale or relationship between the companies.
The non-agency mortgage-bond market has contracted as banks seek jumbo mortgages to hold as investments and bond buyers demand higher relative yields, after showing signs of reviving from its paralysis following the 2008 financial crisis. Issuance has also been restrained by investor distrust of the debt and competition from government-backed programs.
While sales tied to new loans jumped to $13.4 billion last year from $3.5 billion in 2012, they collapsed after September, according to data compiled by Bloomberg. Issuance totals about $1.6 billion this year, compared with more than $6 billion in the first five months of 2013. Sales peaked at $1.2 trillion in both 2005 and 2006.
Jumbo mortgages are those larger than allowed in government-supported programs, currently as much as $729,750 for single-family properties in high-cost areas. Limits range from $417,000 to $625,500 for Fannie Mae and Freddie Mac loans with the lowest costs for borrowers using 20 percent down payments.