Loan Funding Structure, an affiliate of PIMCO, is preparing to sponsor a $364.1 million securitization of a pool of closed-end, second-lien mortgages on primary homes, slated to close this week.
The BRAVO Residential Funding Trust, series CES3, will sell the notes through a series of class A, M and B tranches, which have a final maturity of December 2055, according to Kroll Bond Rating Agency.
BRAVO's notes will repay investors through a sequential payment structure, and a step-up coupon for classes A-1A, A-1B, A-2 and A3, KBRA said.
The A1A notes benefit from credit enhancement levels of 20%, Fitch Ratings finds. Lower in the deal structure, credit enhancement levels range from 16.4% on the A1B notes to 1.35% on the B1 notes.
Morgan Stanley, Bank of America and Barclays are initial note purchasers on the deal.
Asset Securitization Report's deal database finds that the notes rated AAA from KBRA and Fitch Ratings, are expected to pay a coupon of 5.13%. The notes rated AA+/AA from KBRA and Fitch may offer a coupon of 5.44%, and KBRA's BB+ notes are expected to pay 6.93%.
Some 4,155 loans are in the collateral pool, fed to the trust from originators Rocket Mortgage and PennyMac Loan Services, according to Fitch. They also service their respective loans in the pool, along with Shellpoint.
Loans have an average balance of $87,631, according to KBRA. Almost the entire pool, 96.2%, were underwritten to traditional, full documentation standards.
On a weighted average (WA) basis, the loans have a debt-to-income (DTI) ratio of 38.2%, according to KBRA.
Ratings from KBRA range from AAA on the A1 notes to B on the B2 tranche. For Fitch, the ratings range from AAA on the A1 notes to BBB on the M1 mezzanine notes.
