Angel Oak Mortgage Operating Partnership's latest residential mortgage-backed securities (RMBS) deal raises $279.5 million from the capital markets with a pool composed of majority (56.2%) investment properties.
The deal, Angel Oak Mortgage Trust, series 2026-3, will offer notes through class A, M and B tranches, all of which have a final scheduled maturity of June 2071, according to analysts at Fitch Ratings.
Notes will repay investors on a hybrid basis, with the senior notes being repaid on a pro rata basis, while the mezzanine and subordinate classes will repay sequentially.
J.P. Morgan Securities, Deutsche Bank Securities, Goldman Sachs and Brookfield Securities are the initial purchasers on the deal, and is expected to close on July 2.
Half of the class A notes—which included a first cash flow and a last cash flow piece—benefit from credit enhancement levels of 25.40%, according to Fitch and Kroll Bond Rating Agency.
The A1A notes, which will issue the bulk of the notes, $90.3 million, are expected to benefit from enhancement levels of 35.40%, while the A3 notes have credit enhancement levels equaling 9.10% of the note balance, KBRA and Fitch said.
Tranches M1, B1 and B2 have enhancement levels of 5.25%, 1.90% and 1.00%, respectively.
Also, classes A1A, A1B, the first and last cash flow notes, A2 and A3 notes will pay a fixed rate and are capped at the net weighted average coupon, and have a step-up feature. The class M1 certificate pays a coupon based on the lower of a fixed rate or the net weighted average coupon (WAC) rate for the related distribution date, according to Fitch.
A pool of 589 home loans is collateralizing the notes. Investment properties is not only in the majority, 56%, but they represent the largest portion of the pool since the AOMT 2025-12 transaction, which priced in November 2025, according to analysts at Kroll Bond Rating Agency.
Another characteristic is that 43.83% of the pool are non-qualified mortgages (non-QM), the rating agency said.
Borrowers have a FICO rating of 757, an original debt-to-income (DTI) weighted average liquid reserves of $300,505
Angel Oak Mortgage Solutions is the primary originator of the underlying mortgages, even though it accounts for a minority of the pool, 23.14%, various third-party entities originated the rest, each responsible for less than 10%, according to Fitch Ratings.
KBRA assigned ratings of AAA to the A1 notes; AA to the A2 notes; A- to the A3 notes; and BBB, BB- and B- to the M1, B1 and B2 notes. Fitch ratings assigned AAA to the A1 notes; and AA and A to the A2 and A3 notes; and BBB-0 to the M1 notes.
