EFMT Sponsor is offering investors $298.1 million in residential mortgage-backed securities (RMBS), secured by a pool of first-lien mortgages on investor properties and second homes, which were underwritten to agency guidelines.
Investment properties account for a majority of the collateral pool, 61.8%, and second homes make up 38.2%, according to analysts at Kroll Bond Rating Agency. PennyMac Loan Services originated the 870 mortgages in the pool, and will service them, and they have three months of seasoning.
According to the deal's capital structure, notes will be sold through classes A, all of which are exchangeable, and B, the subordinate tranches. Classes A1 through A16 are expected to pay coupons of either 5.00% or 5.50%, according to the rating agency.
Notes A1 through A12; A17 through A22; and A28 and A29 benefit from credit enhancement levels of 15.00%, while the A13 through A16 and A23 and A24 benefit from a credit enhancement level of 8.20%, KBRA said.
Among the subordinate tranches, coupons are expected to pay 6.37%, and the B1 through B5 notes are expected to benefit from credit enhancement levels of 6.20% through 1.10%, according to the rating agency.
The transaction is expected to close on August 13, with
The structure includes a 120-day, stop-advance feature, which will prevent the applicable servicer from providing scheduled interest and principal on loans that are 120 days or more delinquent. Aside from PennyMac Loan Services, Rocket Mortgage is on the deal as master servicer, KBRA said.
KBRA ratings include AAA to most classes of notes; AA+ to the class A14 notes; AA- to the B1 notes; A- to the B2 notes; BBB to the B3 notes; BB+ to the B4 notes; and B+ to the B5 notes.
