Fitch and Morningstar DBRS have provided preliminary ratings for these bonds, ranging from AAA to B-, reflecting the varying levels of risk associated with different segments of the portfolio.
JPMorgan has characterized this deal as “inaugural” in communications with potential investors, according to Bloomberg. The mortgages involved are high-value, or “jumbo,” loans recently issued by JPMorgan to borrowers with strong credit profiles.
The trend of significant or synthetic risk transfers, first popularized among European banks, has gained traction in the US as financial institutions prepare for the implementation of Basel III Endgame regulations. Major US banks, including Goldman Sachs Group Inc. and Morgan Stanley, have similarly engaged in or explored risk transfer agreements over the past year.
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Source: mpamag.com