MFA Financial said it sold its $985.2 million non-agency RMBS re-securitization transaction to Deutsche Bank Securities.
Third-party investors additionally purchased $246.3 million of variable rate senior bonds. Those bonds are rated triple-A by Standard & Poor's, and issued through Deutsche Mortgage Securities via its resecuritization vehicle Remic Trust, Series 2010-RS2 .
The senior bonds issued by Deutsche Mortgage Securities. Remic Trust, Series 2010-RS2 have a weighted average life of 1.3 years and a pass-through rate of one-month LIBOR +125 basis points. Since MFA plans to consolidate the trust, the senior bonds transaction will effectively financed the underlying RMBS at an attractive rate.
In connection with this transaction, MFA acquired $375.2 million of face amount of six classes of mezzanine fixed-rate bonds with S&P ratings ranging from 'AAA' to 'B' and $363.7 million of face amount of non-rated subordinate bonds issued by the trust, which together provide credit support to the senior bonds.
MFA said it will finance these bonds by using repurchase agreements and has the flexibility to sell some or all of these bonds in the future.