Government housing deal could be the spur for JapanÆs MBS market

Outside the US and arguably the UK, the Japanese securitization market is one of the most developed in the world, but its growth, unlike the US and the UK, has not been built from a platform of deals backed by residential mortgages. That sector, however, could receive a welcome boost in March when the state-owned Government Housing Loan Corp (GHLC) will make its debut in the market with a Ñ50 billion ($430 million) issue.

GHLC, the dominant player in the residential mortgage sector with a market share of just over 40% and five million loans originated, has already mandated Credit Suisse First Boston to structure the deal, but will select a lead manager to underwrite the deal on March 7. The banks bidding for the mandate include CSFB, Goldman Sachs, Daiwa Securities, Tokyo Mitsubishi, Salomon Smith Barney, Nomura, Mizuho Securities, Merrill Lynch, Morgan Stanley Dean Witter and Lehman Brothers.