Fannie Mae Exceeds $3 Billion in Single-Family Labeled Social Bond Issuance
June 6, 2024
Social Bond Indicator Provides Insight into Programmatic Social Bond Issuance
WASHINGTON, DC – Fannie Mae (FNMA/OTCQB) released a new disclosure for its single-family mortgage-backed securities (MBS), the Social Indicator. This disclosure helps investors easily identify MBS issued since March 1, 2024 that meet the criteria outlined in Fannie Mae's Single-Family Social Bond Framework.
"We're pleased to provide a social label to help investors better identify pools that are highly aligned with Fannie Mae's mission," said Devang Doshi, Senior Vice President, Single-Family Capital Markets. "With the Social Indicator, investors using our PoolTalk® and Data Dynamics® platforms and other third-party systems, such as Bloomberg, can now easily identify the over $3.6 billion in single-family social bonds that Fannie Mae has issued to date and monitor future issuance to analyze for fit in their portfolio."
This latest disclosure enhancement is another step Fannie Mae has taken to attract new sources of capital to the U.S. mortgage market.
"Since March, Fannie Mae's Whole Loan Conduit has offered monthly issuances of over $600 million in Social MBS to investors, and plans to continue to issue these bonds programmatically," said Nick Sapirie, Vice President, Single-Family Capital Markets. "These MBS offer an attractive profile to investors with a social objective, and those without. The premiums that investors pay for these securities help to encourage lending to the borrowers we are chartered to support, a dynamic we've highlighted in a recent Perspectives blog and research paper. We've also seen consistent issuance from several MBS lenders using our platform."
Fannie Mae's Single-Family Social Bonds are backed by loans to populations that typically face barriers to obtaining affordable housing or access to credit. Fannie Mae's Mission Index™ disclosure is the foundation of the Single-Family Social Bond Framework, which adheres to global standards and is validated by a Second Party Opinion.
"Fannie Mae's Mission Index and single-family social bond framework have significantly increased market transparency by providing pool-level insights into the underlying loans in collateral pools," said Dennis Lee, Securitized Credit Analyst Team Leader, and Ramon de Castro, Portfolio Manager, MBS and RMBS Strategies, both of T. Rowe Price Associates, Inc. "Fannie Mae's thoughtful approach gives us confidence that proceeds are being efficiently allocated to target populations, generating improved outcomes for both target populations and investors, as well as enabling us to share tangible metrics of social impact in U.S. housing with clients."
In line with social bond practices, Fannie Mae will also provide annual impact reporting to help the market understand the social impact of the loans underlying their investments.
To learn more about how premiums investors pay for MBS promote mortgage lending, read "Benefiting Borrowers with a Creative MBS Disclosure Solution."
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