Here is a quote from the Financial Times: "Thailand is preparing to launch the largest securitisation out of Asia, excluding Japan and Australia, with the sale of more than $1bn in bonds backed by residential mortgages... Khan Prachuabmoh, the president of Thailand's Government Housing Bank (GHB), confirmed that the state-owned institution planned to raise at least Bt40bn ($1.06bn) in a deal that is likely to come to market in the first or second quarter of next year... GHB, Thailand's largest mortgage provider and a deposit-taking institution, would use the funds to help fulfil its target of extending Bt100bn in new housing loans in 2007"
Would anyone be willing to explain exactly what it means to back bonds by residential mortgages? Does this basically mean that the bank will use the actual mortgages as collateral to cover bond debt should the bank default? Is the basic idea behind the bank's logic that it can earn more from mortgage payments than it pays out in interest on the bonds? Thanks Jayson Funke Graduate School of Geography Clark University 950 Main Street Worcester, MA 01610
