WASHINGTON, DC–Fannie Mae's Multifamily Green GeMS REMIC No. FNA 2017-M15 A2 has been added to Bloomberg Barclays MSCI Green Bond Index, a measure of fixed-income securities issued to fund projects with direct environmental benefits. The REMIC priced in December 2017 and was backed by loans on green building certified properties. Fannie Mae's first green REMIC priced in February 2017.
The move will help the GSE get a more diverse investor base, improve liquidity and therefore improve the finance and execution for borrowers on the front end, Lisa M Bozzelli, Director, Multfamily Capital Markets at Fannie Mae tells GlobeSt.com.
Fannie Mae pursued inclusion in the index because after the deal priced it received feedback from some investors that they preferred using an index to participate, Bozzelli says. So the GSE began working with MSCI and it was determined that the REMIC met the criteria on size and on how “green” the loans were.
“For us this was an exercise to navigate the green-financing world, which has traditionally been focused on project financing or asset-backed financing. The mortgage-backed security portion of that world is relatively new,” says Bozzelli.
Fannie Mae's next project will be to try to get its Green Rewards Program included in the index, as well as other third-party validators, she says.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
