Warehouse Line of Credit

Warehouse Line of Credit (WHL) is a revolving facility granted to a Borrower* to acquire and warehouse mortgage portfolio for future securitization. Such portfolio is pledged to IFC as collateral of WHL, and is placed into a special purpose vehicle (SPV) in the meantime for the purpose of securitization. The proceeds from future securitization will be funneled back to IFC, thus replenishing the ultimate WHL for subsequent use.

Features of Warehouse Line of Credit:

-Profiles of Potential Clients/Sponsors—Commercial bank and non-bank financial institutions, Secondary Market Conduit.
-Currency—US Dollar or local currency of the countries specified by IFC.
-Security Pledged as Collateral—A qualifying mortgages portfolio.
-Key Documentation—Loan agreement, Trust Agreement, Security Agreement, Servicer Agreement, and MBS issuance prospectus.
-Repayment—Proceeds from future securitization of the subject mortgage portfolio are to be funneled back to IFC to pay down the drawn WHL.
-Standard Fees—Commitment fee of 0.5 percent per annum on the undisbursed principal amount of the line and one-time up-front fee of 1.0 percent of the principal amount of the line.

Impact of Warehouse Line of Credit:

-Help introduce into the domestic capital market such innovative financial instruments as mortgage backed securities which are needed by local institutional investors.
-Develop the primary market by improving the standardization and efficiency of underwriting, documentation and servicing of mortgage business.
-Contribute to improving the legal and regulatory environment for housing finance.
-Help to leverage funds utilization by having a built-in revolving feature that affords “multiplier” effect.

For more information about our work see Housing Finance or contact us.