Publicly traded REIT Two Harbors Investment Corp. is laying the groundwork for a $200 million jumbo MBS deal, partnering with Barclays Bank PLC.
According to a recent SEC filing - which updates an earlier repurchase agreement between the two - there is no set timetable for the offering, but if the deal comes off, Two Harbors would be only the second company to publicly issue a new jumbo MBS bond over the past three years.
It plans to issue a jumbo security once it amasses roughly $200 million of product.
The other active issuer is Redwood Trust, a California-based REIT. Redwood is expecting to issue its fourth transaction in early 2012. In the past it has bought jumbo loans from CitiMortgage and other lenders.
Two Harbors of Minnetonka, Minn., notes that Barclays will "assist" it "sourcing certain jumbo residential loans and developing relationships with mortgage loan originators."
The REIT's affiliate, TH TRS Corp., struck master repurchase agreement with Barclays in May of 2011.
Redwood has had a difficult time buying jumbo mortgages in the secondary market because many banks prefer to keep the loans in portfolio, earning a wide profit margin over their cost of funds. Jumbo loans tend to have five- to seven-year maturities.
