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Ghana Home Loans to pioneer mortgage securitisation
 
Posted on: 10-Jul-2013         Source: thebftonline.com
 
 
 
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.