Mortgage-Backed PTC Listing on NSE: How PTCs Work
Why in the news
India saw its first exchange listing of mortgage-backed pass-through certificates, deepening housing finance and securitisation markets.
Key facts
- Exchange: NSE; size: ₹1,000 crore.
- Structurer: RMBS Development Company Ltd.; assets are LIC Housing Finance home loans.
- Fits the Finance Ministry’s aim of wider financial inclusion and secondary market liquidity in housing finance.
About Pass-Through Certificates
- A lender bundles housing loans into a pool.
- That pool is transferred to a Special Purpose Vehicle (SPV).
- Investors receive PTCs from this vehicle, which forwards the monthly interest and principal paid by borrowers.
- PTCs are fixed-income securities, a key type of asset-backed securities (ABS); they spread risk and improve liquidity.
Significance
- Links debt markets with housing finance and invites wider investor participation.
- Builds confidence and sets a template for later mortgage issues on exchanges.
Exam angle
- SPV role; ABS expansion; structurer RMBS Development Company Ltd.