A pool of mortgages for borrowers’ investment purposes will secure a mortgage-backed securitization (MBS) of $418.4 million, in Oceanview Mortgage Trust’s latest agreement, 2022-INV6.
Borrowers financed the properties through fixed-rate first mortgages, most of which had 30-year terms given to prime borrowers, according to a pre-sale report from Moody’s Investors Service. Single-family homes and multi-family buildings make up the vast majority (89.6%) of the pool, by mortgage balance, according to rating agency Kroll Bond.
BofA Securities and Stifel Nicolaus are the first note purchasers of the agreement, which will issue the notes through a senior-subordinated structure with changing interest payment priority. KBRA says it expects the deal to close on April 29.
Oceanview will issue the bulk of the notes in the “AAA” rated super senior tranches for a total of $355.7 million, with a credit enhancement (CE) of the initial tranche of 15%. The $31.3 million “AAA” Senior Standby Notes will have an initial CE tranche of 7.5%.
The agreement’s credit supports include a default trigger and cumulative loss triggers.
According to KBRA, Community Loan Servicing has been named the Agreement Servicing Agent. Apart from super senior and senior backing ratings, the rating agency plans to assign ratings of “AA+” to the $5.8 million B-1 class; ‘A+’ at tranche B-2 of $9.4 million. The ratings on the rest of the notes will range from “BBB+” on the $4.1 million to “B-” on the $1 million on the B-6 notes.
Moody’s intends to assign ratings ranging from “Aaa” to “Baa3”, he said.
The collateral pool consisted of 1,140 loans with an average value of $367,101, KBRA said. The pool is also quite diverse, with the top 20 borrowers making up 6.1% of the pool, according to Moody’s.
On a weighted average (WA) basis, the loans have an initial term of 360 months. The borrowers, on a WA basis, had an initial KBRA credit score of 769, an initial loan-to-value (LTV) ratio of 67.7% and a debt-to-income ratio of 36.3%, according to KBRA.
Additionally, about 23.4% of borrowers in the pool were self-employed, with a non-zero median median annual income of $165,225.