StoneX Launches New Mortgage Credit Product Amid Strong Earnings
On September 10, StoneX Group (NASDAQ:SNEX) and DeltaTerra Investments introduced a synthetic credit structure tied to Agency mortgage bonds from Fannie Mae and Freddie Mac. The product allows institutional investors exposure via credit default swaps rather than direct bond purchases. This innovation follows StoneX's strong fiscal third-quarter performance in which net operating revenue rose 47% year-over-year, reaching $719.7 million, with net income more than doubling to $127.9 million. The Commercial and Institutional segments were key contributors, showing significant growth driven by increased derivatives contract volumes and the integration of R.J. O'Brien's acquisition. StoneX now claims to be the largest non-bank futures commission merchant globally. The DeltaTerra deal aligns with this expansion strategy as it positions StoneX in a new mortgage market niche. Despite overall positive results, not all segments showed growth; Self-Directed/Retail revenue and income declined due to lower principal gains and consulting fees. Additionally, rising interest expenses and variable costs highlight the increasing cost of funding for continued growth.
Topics: credit default swaps institutional finance mortgage bonds StoneX earnings