PennyMac Mortgage Investment Trust on Tuesday said it plans to issue its first residential-mortgage bonds starting in the third quarter.
The Moorpark real-estate investment firm joins other companies issuing bonds to finance residential housing without a government guarantee. Since its founding in 2009 by former executives of Countrywide Financial, PennyMac has mainly focused on distressed investments and government-backed home programs.
The trust hopes to tap interest by investors in the jumbo loan market. Jumbo loans cover balances above the ceiling for government-guaranteed loans. The ceiling averages $417,000 nationally but is higher in more expensive markets such as California.
"We are making steady progress in the expansion
of our presence as a jumbo aggregator," Chief Executive Stanford Kurland said during a conference call with analysts. “Private-label securitization of jumbo loans is a significant new opportunity for PennyMac.”
PennyMac would securitize the bonds by selling some to other investors and keeping a riskier subordinate portion. The company expects leveraged returns of 12 percent to 19 percent on the subordinate portion.
PennyMac earlier reported first-quarter net income of $53.3 million (90 cents a share), beating the Wall Street consensus of 82 cents. Year-earlier results were not given in the release, but earlier reports said the trust earned 65 cents a share in the first quarter of last year.
PennyMac Mortgage shares closed up 9 cents, or less than 1 percent, to $24.22 on the New York Stock Exchange.