Angel Oak Capital’s second securitization of non-prime residential mortgages brought its funding costs down significantly, helped by the addition of some new investors.

The senior tranche of securities issued in the $132.65 million AOMT 2016-1a securitization has a coupon of 3.5%; that’s a full percentage point lower than the equivalent tranche of Angel Oak’s original deal, completed in December 2015. While conditions in the credit markets have improved markedly in the interim, the lower coupon also reflects the fact that there was a larger pool of investors, according to Sreeni Prabhu, Angel Oak’s chief executive and chief investment officer.

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