Shellpoint Partners LLC announced that it is withdrawing the Shellpoint Asset Funding Trust (SAFT) 2013-2 securitization (which was offered under Rule 144A) from the market in favor of selling the underlying whole loans.
“This is not a decision we’re undertaking lightly,” said Bob Magee, chief investment officer of Shellpoint, “but at some point we can’t ignore best execution. The current RMBS bid is not competitive with the whole loan bid, even accounting for the qualitative cost of pausing our RMBS program. There is a substantial pricing disconnect between the whole loan and new issue RMBS secondary markets. We went very far down the road on SAFT 2013-2 – in fact we planned to close next week – hoping that the disconnect would ease, but the realities of the current market are clear.”
Saul Sanders, co-CEO of Shellpoint, indicated that Shellpoint remains committed to building a robust private label RMBS program. “We intend to continue our efforts in the non-agency market and will, like other participants, monitor the secondary markets as they evolve. We will also continue to work with others in the industry and in Washington to help evaluate the issues that challenge the return of a healthy, sustainable RMBS market.”