Investing in MBS

Mortgage Backed Securities (MBS) are defined as securities backed by a pool of senior secured property loans. This pool generates a cash flow consisting of interest payments and also, in part, repayment that is passed on in a defined order to the various investors holding the paper.

Münchener Hypothekenbank invests in MBS as a complementary alternative credit business to its commercial property lending activities.

Our investment focus in this area is on high-quality, prime segment European paper that has a good rating and a good risk/reward profile. We only make very selective investments and solely in Residential Mortgage Backed Securities (RMBS) and Commercial Mortgage Backed Securities (CMBS), as well in securities that are solely backed by property.

In principle, our investment activities are oriented on a middle to long-term basis. In general, Münchener Hypothekenbank follows a buy-and-hold strategy.