A house for sale in Pittsburgh
United Press
Intercontinental Exchange Inc., the owner of the New York Stock Exchange, left $ 6.5 billion in corporate branding Monday to help expand its footprint in the U.S. mortgage sector.
That’s more than half of the $ 11 billion that ICE ICE,
a global provider, clearinghouse and data provider, agreed to pay for cloud-based mortgage platform provider Ellie Mae, in a cash and stock deal announced earlier this month.
ICE had no comment on this article, but said the addition of Ellie Mae to its platform helps establish it “as the leading provider of end-to-end electronic workflow solutions serving the evolving U.S. housing mortgage industry,” in a statement earlier this month announcing its deal to buy Ellie Mae.
The global financial crisis of 2007-’08 exposed major weaknesses in the mortgage and service sector, resulting in the Attorneys General of the States, including Kamala Harris, the election of Joe Biden as Vice President, and $ 25 billion extract for fines from major U.S. lenders.
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While Ellie Mae does not make mortgage loans herself, it is among a number of platforms looking to bring more of the roughly $ 11.2 trillion market for home mortgage financing into the digital age.
Despite the pandemic and its economic shocks, the Federal Reserve’s unusual efforts to keep credit affordable and flowing during the crisis are expected to support US lending to $ 3.1 trillion this year, a new post after 2008 , according to Goldman Sachs analysts.
It has also rarely been a better time for U.S. companies to borrow in the booming U.S. corporate bond market, which last month saw returns on the newly visited ICE BofA U.S. Corporate Index fall below 2% for the first time in history .
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Prices on the five-part ICE bond deal reflect the continued chase for returns among investors since March, when the Fed released its edge of emergency lending and bond programs to not dry out credit.
Specifically, the longest, a package of 40-year ICE bonds, cleared the market at a spread of 160 basis points above a risk-free benchmark to yield 3.04%, according to a person with direct knowledge of the deal.
Price levels initially circulated in the range of 180 basis points by bankers seeking to drum up interest in the debt offering, which A3 was rated by Moody’s Investors Service and BBB + by S&P Global.
Most US corporate bonds are priced against a “spread” above US Treasuries TMUBMUSD10Y,
where the spread was how much an investor is paid above a benchmark for own bonds.
The band’s low returns have been attributed to the lifting of large U.S. stock indexes near their full height, about 100 days since the onset of the coronavirus in the U.S. sent shares in one of the sharpest downward spirals in the US. memory. The Dow Jones Industrial Average DJIA,
Monday’s session ended about 5.8% off its record high in February.
ICE said it plans to raise $ 9.25 billion in cash, including Monday’s debt increase, as well as $ 1.75 billion in share through the sale of new shares of ICE common stock to buy Ellie Mae, in publicly submitted deal documents .
Although mergers and acquisitions took a ‘nosedive’ in the first quarter, a team of analysts led by Ken Johnson at Wells Fargo Investment Institute said they think volumes, particularly in ‘automation and data analytics’, for a pickup could be because U.S. public companies reported more than $ 2.5 trillion in cash in the second quarter.
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“The heavy hit brick-and-mortar retail and travel and leisure sectors
could also present attractive M&A opportunities as they work out and sell
companies in an effort to restore balance and improve liquidity, ”Johnson’s team wrote in a note on Monday.
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