Market Absorbs Dutch RMBS Sale

Buyers readily absorbed the Dutch State Treasury Agency’s more than $4 billion sale of non-agency residential mortgage-backed securities from its ING Illiquid Asset Back-up Facility portfolio on Thursday.

Prices closed higher for the week, analysts at Barclays said in a report on Friday.

“We have previously argued that the overall non-agencies supply-demand conditions remain balanced and such sales should have only a limited effect on pricing,” said analysts in the report.

All six dealers  included in the competitive auction process managed to win a portion, although the bulk was awarded to two shops, Barclays and Credit Suisse. Bank of America Merrill Lynch, Citigroup, Goldman Sachs and Morgan Stanley were the other four banks selected by the Dutch State Treasury.

The sale is the second auction executed by the Dutch State Treasury. Another $2.1 billion remains in the ING portfolio.