A&D Mortgage, the Hollywood, Fla.-based lender, just raised $392.6 million from residential mortgage-backed securities investors, through the A&D Mortgage Trust 2024-NQM1.
The first deal of the 2024 vintage for A&D Mortgage is secured by fixed-rate mortgage loans, most of which, 91.2%, A&D originated, according to ratings analysts at Fitch Ratings and DBRS Morningstar. Correspondents account for the other 8.8% of originations. The deal will issue A, M and B class notes—mostly fixed rate—through a senior-subordinate structure of about nine tranches, according to Fitch and DBRS.
Nomura Securities International is manager on the deal and lead underwriter, according to the Asset Securitization Report's deal database and Fitch, while DBRS says that Nomura, Barclays Capital, Mizuho Securities and Santander U.S. Capital Markets are initial note purchasers.
The current deal is a little smaller than the last one from the ADMT program, the ADMT 2023-NQM5, in several ways. Some 1,065 loans are in the collateral pool. That is mostly in keeping with previous ADMT deals, but smaller than Fitch's 2020-2022 nonprime industry average of 722 loans. The collateral has 4.3 months of seasoning, also lower than the nonprime industry average of 9.6 months, according to Fitch.
Classes A1, A2 and A3 notes have credit enhancement levels of 31.55%, 24.25%, and 15.55%, respectively.
In a closer look, the ADMT 2024-NQM1's collateral contains loans from six programs—super prime, prime, DSCR, second-lien loans, foreign national, underwritten with full documentation and foreign national loans underwritten though debt-service coverage ratio, DBRS said.
DBRS also notes that the underlying mortgages, which have an average loan balance of $368,691, generally have robust credit attributes. Combined loan-to-value ratios are at about 71.7%, borrowers have a WA household income of $596,633, and liquid reserves of $172,562.
DBRS assigned preliminary ratings of AAA, AA and A to classes, A1, A2 and A3, respectively; and BBB, BB and B to the M1, B1 and B2 classes.
Fitch assigned ratings of AAA, AA- and A- to classes A1, A2 and A3, respectively; and BBB- to the M1 notes. Fitch did not rate ADMT 2024-NQM1's class B notes.
