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Background |
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Established in 1997 with capital of HK$3.3 billion |
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Fully owned by The Hong Kong Government |
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Objectives |
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promote home-ownership |
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improve banking and monetary stability |
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support growth and development of the local capital market |
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Business |
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mortgage purchase on a non-recourse basis |
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debt issuance |
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securitization of mortgage loans |
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mortgage insurance |
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Two MBS Programmes |
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HKMC Guaranteed Mortgage-Backed Pass-Through Securitisation Programme |
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Bauhinia MBS Limited – US$3 billion multi-currency MBS Programme |
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| Comparison of the two Programmes |
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Guaranteed Mortgage-Backed
Pass-through Securitisation
Programme |
Bauhinia MBS Limited US$3 billion
MBS Securitisation
Programme |
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Issuer is HKMC Funding Corporation (1) Limited, incorporated in Hong Kong |
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Issuer is Bauhinia MBS Limited, incorporated in Cayman Islands
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Roles of HKMC |
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Roles of HKMC |
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Arranger |
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Guarantor |
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Guarantor |
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Master Servicer |
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Master Servicer |
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Transaction Administrator |
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Transaction Administrator |
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Target to Hong Kong investors |
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Target to both Hong Kong and international investors |
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Pass-through receipt |
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Bond-style |
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HK$ denomination |
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HK$ or foreign
currency |
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Article 292 - Authorizes Union Government to borrow within such limits as may be fixed from time to time by Parliament by law – similar authorization to issue guarantees |
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First MBS programme for bi-lateral MBS issues established in October 1999 |
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Retail MBS Initiative |
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In October 2004, HKMC launched a HK$2 billion MBS with 3 tranches for retail investors for an aggregate amount of HK$900 million |
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19 banks opened over 860 branches, telephone and the internet banking facilities to place the retail MBS |
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Placing banks committed to making market |
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Programme Prospectus and Issue Prospectus drafted in plain language |
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Background |
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Established by capital subscriptions from Korean government and Bank of Korea on March 1, 2004 |
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Current paid-in capital: 376 billion won (Authorized capital: 2 trillion won) |
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Paid-in capital to be increased to 450 billion won (approximately US$422 million) by the end of 2004 |
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Losses in excess of reserves to be covered by the government (KHFC Act) |
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Major Lines of Business |
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Purchase mortgages and issue MBS (limited to 50 times equity capital) |
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Mortgage portfolio business |
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Issue bonds (up to 10 times equity capital) and borrow from financial institutions |
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Provide credit lines to lenders to support the origination of mortgages |
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Purchase student loans and issue KHFC guaranteed SLBS |
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Major Objectives |
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| Underlying Assets |
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Mortgages originated by participating lenders under the securitization commitment program |
| Issuance Amount |
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400-500 billion won (per issue) |
| Issuer |
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Trust (Trustee: KHFC) |
| Issuance Structure |
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KHFC provides 100% Guarantee on MBS P&I payment |
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Multiple bullet tranches with differing maturities |
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Sequentially partially callable on quarterly basis |
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Quarterly MBS P&I repayment by exercise of call option |
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Short-term bullet tranches without call option, if necessary, supported by fast-pay tranche |
| MBS Terms |
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Fixed-rate MBS (Quarterly coupon payment) |
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Triple A credit rating; listed on KSE; deposited at
KSD; public offering |
| Servicer |
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Participating lenders |
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Background |
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Established in 1986 |
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To promote the secondary mortgage market
in Malaysia |
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20% shares owned by Bank
Negara Malaysia (Central Bank) |
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Other 80% shares owned by 20 local
banking groups or local subsidiaries of international banks |
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Wide range of products (all on a full recourse basis) |
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Housing Loans |
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Industrial Property Loans |
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Hire Purchase |
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Leasing Debts (Conventional and Islamic) |
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Credit Cards Receivables |
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Debt Securities |
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Cagamas Fixed Rate Bonds |
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Cagamas Floating Rate Bonds |
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Cagamas Notes |
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Sanadat Cagamas (Islamic Bonds) |
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Structure of MBS |
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Issue bonds directly similar to FNMA until some innovations emerge recently |
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Some Special Attributes of Cagamas Debt Securities |
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Risk weight of 10% assigned by Bank Negara Malaysia |
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Book-entry |
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Secondary Market Trading |
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No stamp duty for trading |
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10 Principal Dealers appointed by Bank Negara Malaysia |
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