Redwood Trust Inc. plans to sell bonds backed by $293.6 million of new U.S. home loans, in the seventh sale of such securities without government backing since the market froze in 2008, according to credit-rating firms.
Redwood, a specialist in so-called jumbo mortgages, issued five of the previous offerings of such securities since the market restarted in 2010, according to data compiled by Bloomberg. Kroll Bond Ratings Inc. and Fitch Ratings expect to assign top grades to $272.2 million of the bonds in the latest deal, according to “pre-sale” reports sent today by e-mail.
Issuance of so-called non-agency home-loan bonds peaked at $1.2 trillion in both 2005 and 2006 before collapsing as their prices tumbled amid soaring foreclosures and plunging home values. Government-supported mortgage programs and demand from banks for loans are limiting the market’s revival.
Michael McMahon, a spokesman for Redwood, didn’t immediately return a telephone message today. The real estate investment trust is based in Mill Valley, California.
Barclays Plc is managing the offering, which would be Redwood’s third this year, Bloomberg data show.
Credit Suisse Group AG and Chimera Investment Corp., the New York-based REIT, teamed on the last sale in the non-agency market with a $730 million deal in March that Fitch said received grades that were too high from its rivals.
Jumbo home loans are ones larger than allowed in government-supported programs, currently as much as $729,750 for single-family properties in some 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.