In general, it constitutes the time between deployment of funds for a specific project/ use and the start of actual operations and appearance of intended results (e.g., for manufacturing a product or delivering a service). In other words, a gestation period is the span of time between the start of an investment project and the time its results start to appear in the form of products, services, facilities, etc.
In the context of mortgage-backed securities (MBSs), it is the time between the date an issuer files documents to the federal agency, e.g., GNMA, for the final pool approval and the date the new MBS is issued. This is usually the case with a reverse repurchase (repo) agreement (the so-called gestation period repo) by which a mortgage firm sells federally guaranteed MBSs to a securities dealer and agrees to repurchase them at a prespecified price on a future date (the time in between is the gestation period).
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