Japan housing finance sells RMBS at widest spread since 2023
Longer-tenor yields are also near multi-year highs
[TOKYO] Japan Housing Finance Agency sold 50.2 billion yen (S$437 million) of residential mortgage-backed securities (RMBS) at the widest spread in more than two years, according to lead manager Goldman Sachs.
The spread on the RMBS, which funds long-term fixed-rate housing loans, was set at 51 basis points, four basis points more than in August. It marked the first time the spread has returned to the 50 basis-point range since June 2023.
The government-backed lender issues RMBS backed by mortgage loans it purchases from banks. With Japan’s positive interest-rate environment prompting more households to switch from floating- to fixed-rate mortgages, the agency widened the spread to attract new investor demand and secure stable funding in the second half of the fiscal year.
Japanese bond yields have been rising, with that on the policy-sensitive two-year note reaching 0.885 per cent on Friday (Sep 19), the highest since 2008. Longer-tenor yields are also near multi-year highs. BLOOMBERG
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