HLSS Holdings is coming out with a $300 million securitization of servicer advances, according to a presale report by Standard & Poor's.
The deal, known as 'Advance Receivables-Backed Notes Series 2013-T7,' is split into four tranches: the A-T7 notes have been assigned a preliminary AAA’ rating ; B-T7 notes have been assigned a preliminary AA’ rating; C-T7 notes have been assigned a preliminary A’ ratings ; and D-T7 notes have been assigned a preliminary BBB’ rating.
According to the S&P Presale report the series 2013-T7 notes are very similar to the 2013-T5 series that were issued in August 2013. Both deals have 36-month revolving periods, similar coupon rates, recovery curves, and advance rates.
The series 2013-T7 notes are backed by servicer advance and servicing fee advance receivables. These are related to the obligation of the servicer — in this case Ocwen Loan Servicing — to cover payments missed by borrowers on loans in an outstanding securitization deal. The flows into the HLSS transaction come from the reimbursement of those advances.
The arrangers on the deal are Barclays Capital, Credit Suisse Securities, and Wells Fargo Securities.