Fees on CMBS & RMBS securitisation
Hi all,
I've trawled Google for this data, but haven't found it anywhere.
Does anyone know how much an investment bank will make in revenue on securitising commercial and residential mortgages? How are these fees structured - is it a certain % of the face value of the mortgages or a flat fee plus some variable component? I'm sure that for more straightforward deals the fees are lower and for complex deals they are higher. Can anyone give me a range for RMBS & CMBS products?
A bonus would be if someone can shed some light on non real estate related securitisation deals such as auto loans, credit card receivables and other, more esoteric lending.
Finally, how do these fees differ across markets, for example the US in comparison to where I'm based here in Britain?
Thank you very much in advance!
I can only comment on the agency CMBS products that I have seen and will assume that anything private label will be higher in fees. From their lender entities/partnerships, the GSEs will acquire a bunch of loans, form a trust entity with servicer/special services, a trustee, etc.. The fees come in the form of "royalty" fees which are quoted in basis points on the principal value of the certificates. From Freddie, a general number of 14 Bps of the CMBS coupon are paid in fees. Then, Freddie takes a guarantor fee of around 20 Bps on the face value of the guaranteed classes of the security (they only guarantee the A-tranches).
For these securities, the banks are book runners and placement agents. So they probably take a variable performance fee based on how well the tranches are sold, so widely ranges but I would say another few Bps. i.e. B and C tranches will have higher fees compared to the investment grade. I don't think you will find these publicly quoted, because they probably come out of Fannie/Freddie's profit.
% of par / gross proceeds, margins have decreased over the years
I think a few years ago it was like 100-200 bps per pool. No idea what it is today.
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