GCAT 2025-INV1, a residential mortgage-backed securities (RMBS) deal sponsored by Blue River Mortgage III, is preparing to sell $423.2 million in securitized bonds to investors, backed by revenue from first-lien mortgages investors properties and second homes.
The transaction will issue notes through more than 20 tranches of notes, which includes exchangeable classes, according to Kroll Bond Rating Agency. The notes are expected to pay coupons of either 5.5%, 6.0% or 6.5% from the A1 notes through the A24 notes, according to Asset Securitization Report's deal database.
Most of the class B notes will pay coupons of 6.6%, while the exchangeable notes are expected to pay coupons of 0.16%, 0.5 or 1%, according to ASR's deal database.
Bank of America Merrill Lynch is the underwriter and manager on the deal.
The A4, A10 and A12 benefit from 15.0% in credit enhancement, according to KBRA.
KBRA assigns AAA to the A1 through the A12 notes, as well as the AX4 through the AX13. The rating agency also assigned AA+ to the AX14 and AX15 notes; AA to the B1A and BX1 notes; AA to the B1A and BX1; A to the B2A and BX2 notes; and BBB through B+ to the B3 and B5 notes.
Moody's assigns ratings of Aaa through Aa1 on the A1 through AX22 notes; and Baa2 through B2 on the B3 through B5 notes.
The 1,075 fixed-rate mortgages in the pool are financing properties that are not owner occupied, according to analysts at Kroll Bond Rating Agency. Investment properties are the primary properties backing the collateral pool, at 80.3%, while second homes account for 19.7% of the pool, according to KBRA.
Loans were underwritten along agency guidelines, primarily—PennyMac Loan Services is the largest originator in the pool, having provided 21.3% of the mortgages, KBRA said.
The loans in the collateral pool have an average balance of $393,723, with a weighted average coupon of 6.88%. Also on a WA basis, underlying borrowers have a FICO score of 772, and an original loan-to-value ratio of 73.0%, KBRA said.
