Redwood Trust Inc., (RWT) seeking to reopen the U.S. market for private-label mortgage securities, disclosed Wednesday that it plans to issue about $222 million of bonds backed by new jumbo home mortgages.
Private-label securities are those that aren't guaranteed by Fannie Mae (FNM), Freddie Mac (FRE) or any other government-related entity.
The transaction is likely to mark the first sale in more than two years of private-label securities backed by newly originated home mortgages. Other firms recently have issued private-label securities containing mortgages that were made in past years.
The market for private-label mortgage securities dried up more than two years ago when a surge in defaults sent investors scurrying for the safety of government-backed paper.
Redwood, a Mill Valley, Calif., mortgage-investment manager, made the disclosure in a filing with the Securities and Exchange Commission.
The offering's lead manager is Citigroup Global Markets Inc. and the co-manager is J.P. Morgan Securities. The planned closing date is April 28.