MBS

Commercial and industrial customers comprised about 60% of SIGECO's electric sales, which potentially exposes the pool to volatility due to business changeable cycles.

The properties have a purchase price of $684.8 million, and an issuer cost basis of $744.4 million, a debt yield of 7.0%, and a debt service coverage ratio of 1.44x.

The current transaction is shaping up to be a smaller deal with higher quality assets, compared with the CMLTI 2022-RP4.

Notes will be repaid through a modified sequential structure, which calls for the A-1 and M-1 through M-3 classes to receive principal on a pro-rata basis.

The three senior classes should repay investors with coupons of 6.73%, 7.13% and 7.64% on classes A1, A2 and A3, while are expected to issue floating-rate notes.

The marketplace has a large appetite to acquire risk-adjusted rental product. Investors see tailwinds leading to a revitalization of SFR capital markets by yearend.

JPMMT 2023-4, as the deal is known, has a cross-collateralization structure that divides the collateral into two groups that determine the repayment of principal and interest. This is similar to previous JPMMT transactions.

The non-qualified mortgage pool consists mostly of loans underwritten to less than full documentation, some 96%. Also 47% of the loans were underwritten to a bank statement program for verifying income.

While the mortgages from this Community Development Financial Institution lack income verification, the borrowers' credit is actually near prime, according to DBRS Morningstar.

The investor segment will have to be mindful as it gains ground, executives said Tuesday, noting that the sector takes experience, skill and savvy awareness of risks.