Hometap Equity Partners recently raised $278 million from the securitization market, in a deal backed by revenue from a pool of home equity investment (HEI) products. It is the Boston-based company's largest deal to date.
The transaction issues notes to investors through three tranches of class A, B and C notes, according to ratings analysts at Morningstar DBRS. All of the notes have an April 2042 legal final maturity date, and a BBB rating on the classes A and B notes. Credit enhancement on the class A and class B notes amount to 22.6% and 17.5%, respectively.
HTAP Issuer Trust 2024-2 will repay investors sequentially and through a senior-subordinate structure, DBRS said. The class A and B notes will receive cash distributions to reduce the interest payment amount and any interest carryforward. Principal payments will be made to the class A notes after that. The same will apply to the class B notes. The class C notes receive principal only and will not be entitled to any interest payments.
Nomura Securities and TCBI Securities are initial note purchasers on the deal, which is the second deal from its proprietary securitization platform. Hometap, the Boston-based financial technology company, offers homeowners access to the equity in their homes without additional debt, says the debut deal was oversubscribed.
Two thousand, two hundred, fifty-five contracts are in the collateral pool, composed of first, second and third liens on residential properties with original terms to maturity of up to 10 years, according to the rating agency. Hometap Equity Partners originated the loans, while BSI Financial Services is the backup asset manager.
While Hopetap Equity Partners plays so many key roles on the deal, CF HT Assets is the deal sponsor, according to DBRS.
