We are preparing this note amidst unprecedented market conditions. On March 11, 2020, the World Health Organisation (WHO) declared Covid-19 a global pandemic. Efforts to stem the spread of this deadly virus have debilitating effects on the global economy. The local economy is expected to decline by 4.5% in 2020 before recovering by 2.6% in 2021.
The Stay at Home measures an other short term restrictions on business activities have impacted our clients. As noted by the Government of Trinidad and Tobago through the Ministry of Finance, Home Mortgage Bank (HMB) has offered mortgagors, impacted by household income reductions, payment deferrals for up to three (3) months in the first instance with possible extensions up to six (6) months pending further developments. HMB expects other mortgagors to continue making their payments as per schedule which will ensure continuous generation of sufficient cash flows to meet your investment return and cash flow expectations.
In response to the Covid-19 pandemic HMB activated its Business Continuity Plan (BCP) and we are confident that our liquidity management tools will allow us to weather this storm and meet our obligations to our investors.
HMB’s investment suite includes the following products:
- Mutual Funds – Mortgage Participation Fund & Samaan Tree Fund
- Collateralized Mortgage Obligations
Bondholders and investors in the Mortgage Participation Fund have already had the full backing of Home Mortgage Bank. During these unprecedented times HMB will continue to meet this obligations.
By product design investors into the Samaan Tree Fund and Collateralized Mortgage Obligations are exposed to mortgage payment deferrals. These products generated their investment returns and cashs flows from specifically assigned prime mortgages. The facilitation of mortgage payment deferrals on mortgages assigned to these products could have a negative impact on payouts to investors. However, we are of the view that facilitating mortgage payment deferrals is our corporate social responsibility in this unprecedented time.
In doing all within our power to mitigate the effects of Covid-19 on our business, HMB has taken the decision to support these products by meeting any shortfall in payments to investors as a result of a deferral in mortgage payments up to May 31, 2020 in the first instance. At that time HMB shall revisit this decision and communicate any changes in this regard to you.
For further clarification or additional information on other investment opportunities, please contact:
Manager, Fund Management and Capital Markets
Senior Analyst, Fund Management and Capital Markets
Brent Mc Fee
Chief Executive Officer (Ag.)