Finance

The OCCU 2023-1 transaction will come to market as a 144a transaction, with higher levels of credit enhancement from yield supplement overcollateralization, initial hard credit enhancement and excess spread.

Subordination increased for the class A and class C notes, to 7.04% and 2.10%, respectively, from 7.00% and 1.50%. Meanwhile subordination decreased on the class B notes to 3.80%, from 4.25%.

The real estate investment trust arm of two affiliate mortgage-related companies could reduce other debt and finance purchases of loans, servicing or securities.

CLOs are turning to another type of debt — junk bonds — for the security packages that underpin the investment vehicles that are sold to insurers and pension funds.

Backed by revenue from point-of-sale unsecured consumer loans, the upsized deal also features expandable notes.

The transaction's credit enhancement levels are lower than what was seen on the 2023-A pool, but is still strong, and is still high compared with peer transactions.

With uncertain outlooks surrounding the economy and interests, investment managers looking for safer fixed-income investments are finding underpriced assets.

Tractors make up the vast majority of the vehicles in the pool, 92.5%, while trailers, trucks and buses account for 4.1%, 2.3% and 1.1%, respectively.

The SEC could crimp effective investor communications, while IOSCO seeks feedback on 12 proposed "good practices" when operating in the leveraged loan and CLO markets.

Rating agencies say the A, B, C and D notes have about 29.0%, 23.8%, 17.3% and 14.0% in credit enhancement, respectively, while A, B, and C notes enjoy a 15.9%, 10.6% and 4.0% in subordination.

Optimism may be building that the Fed is poised to steer the economy toward a soft landing, but Treasury market has delivered what is widely understood as a starkly different message: The economy is veering toward a contraction.

The impact on things like servicing rights would raise costs even for lenders that aren't banks, according to Mortgage Bankers Association President and CEO Bob Broeksmit. Others disagree.

Despite an industrywide rough patch, EverBank still sees promise in the niche business line. The Jacksonville, Florida, company has hired a pair of prominent industry experts to lead a new division tasked with serving investment funds.

Companies with public ratings from a national recognized rating agency make up 66.9% of the obligors in the pool, and those with an investment-grade rating represent 34.9% of the pool.

The notes benefit from a step-up event concerning class D. If an optional redemption does not occur in the expected redemption date, then the interest rate on the class D notes will increase by 3.0%.

The mortgages are part of a program that received congressional scrutiny earlier this year.

The moves will result in a number of job cuts, though the company doesn't yet have firm targets for how many employees will be affected.

Notes will repay principal to investors sequentially. All junior notes will be shut out from receiving any principal payments until the immediate senior notes are paid.

The renewed interest in CLOs, which repackage leveraged loans into bonds of varying risk and size, comes after a very slow year for the market.

The pool has a 25% concentration limit for electric vehicles, up from 15% from Series 2023-5. This increases risks to the transaction, because residual values on those types of cars are still unknown.