Almost six months after Groundfloor Finance closed the mortgage-backed securities (MBS) sector's first deferred pay residential-transition-loan (RTL) securitization, the company returned to sell just over $82 million in notes.
The second issuance, GFLR 2025-1, follows the same structure as the first transaction, which was a rule 144A offering. Groundfloor sold a single A class of unrated notes, with a maturity of May 25, 2028.
The bond coupon is 7.37%, according to Groundfloor. Due to market volatility, Groundfloor expected the transaction to price at 350 over, according to emailed responses from Nick Bhargava, co-founder of Grounfloor. Instead, it priced at 335 over, Bhargava said.
"This is a 10 basis-point spread over our December deal, which we think is good, given the increased volatility," Bhargava said.
Performance Trust Capital Partners also functioned as bookrunner on the deal, as it did on the first transaction. Groundfloor sold the notes to credit unions and depositories, as well as non-bank purchasers, according to Bhargava.
RTL transactions are a rising asset, with more rated transactions coming to market ever since Morningstar DBRS published its methodology for rating the securitizations in 2023.
Deferred-pay RTL securitizations will pay principal at bond maturity, while giving investors an attractive coupon.
