Cerberus Capital Management keeps cranking out bonds backed by re-performing residential mortgages.
The sponsor is out the market with its sixth deal of the year off the Towd Point platform.
Towd Point Mortgage Trust 2015-6 is for $888.4 million, according to a presale from Fitch Ratings. All eight tranches in the deal have a legal final maturity of 40 years.
The largest slice of the deal is class A1 notes, totaling $515.3million and rated ‘AAA.’
The underlying pool consists of 4,825 performing and re-performing mortgages, most of which fall under the latter category. A good 78.4% of the loans have undergone modification, some more than once.
Some 75.9% of the loans have been receiving payments for the past two years, making them “clean current.” The rest are “dirty current,” meaning they’re not in default but have seen more recent past due payments.
But all loans were current as of the cutoff date for inclusion in the deal.
The vast majority—94%—of the mortgage are floating-rate; the other 6% are adjustable-rate. The weighted average (WA) gross coupon on the mortgages is 4.46%. The WA original loan-to-value ratio is 81.6%, the WA FICO of the underlying borrowers is 685.
While Cerberus Global Residential Mortgage Opportunity Fund is the provider of representations for the transaction; that is, it stands behind the underwriting of the underlying mortgages. But under the terms of the deal Cerberus is only required to buy back loan that has breached its reps before the Dec. 2016 payment date.
After that time, breaches will be covered by a reserve fund and the anticipated increased cushion against losses that takes place as loans pay down.
Cerberus’s prior Towd deal was for $1.1 billion.