The $300 million offering marks private-market-specialist StepStone's inaugural middle market CLO.

ABS overall should outperform, but risks remain in specific areas

Over the past two weeks, the 10-year Treasury yield, priced on market expectations, increased over 40 basis points and that is finally being seen in the Freddie Mac survey.

The deferred pay structure offers investors a premium over traditional residential transition loan securitizations.

Deal finds lower pricing and adds a new class of AAA notes.

The Federal Reserve lowered its policy rate but signaled a more "cautious" approach to future cuts in light of higher inflation expectations. Policy uncertainty was one of several contributing factors to that change in forecast.

Higher charges for BB bonds would only marginally impact CLO market.

Tighter spreads are expected as floating-rate demand continues.

The deal mitigates mortgage-pool risk with CLO credit strengths

Nonagency issuances are expected to increase 85% for this year over 2023, and rise another 36% in 2025, the second best since the financial crisis.

Unlike some recent RMBS deals, both exclude riskier interest-only loans and those supporting investment properties.

Legacy RMBS structured to withstand challenging mortgage market