AIG plans $430M prime-jumbo securitization in its first 2020 MBS

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American International Group (AIG) Investments is sponsoring its seventh securitization of 30-year and 20-year prime jumbo loans from its Pearl Street Mortgage trust, according to presale reports.

The $430.2 million PSMC 2020-1 transaction is a pool of 602 high-priced home loans with an average loan balance of $715,978.

All of the loans are considered qualified mortgages that meet the Consumer Financial Protection Bureau’s safe harbor qualified mortgage standards.

AIG (NYSE: AIG) acquired the loans from several third-party lenders including Caliber Home Loans, HomeBridge Financial Services and Parkside Lending.

The weighted average borrower FICO is 775, with 85% of the borrowers with scores above 750. The current loan-to-value ratio of the loans, which are seasoned an average of four months, is 69.9% - an indicator of substantial borrower equity in their properties that reduces default risk, according to Fitch. The loans have weighted average coupons of 3.9%.

The pool has 40% of the loans concentrated in California.

The PSMC 2020-1 Trust offering includes nine classes of term and interest-only senior notes with preliminary AAA ratings. Five of the six term classes benefit from 15% credit enhancement, including subordination on five classes of Class B notes with various ratings from AA through single-B, according to Fitch.

AIG has sponsored six previous qualified-mortgage securitizations since it began sponsoring its own private-label RMBS shelf in 2018. The global reinsurer has been acquiring prime-jumbo assets since 2013, and previously issued two private-label mortgage securitizations under Credit Suisse’s CSMC platform.

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