PennyMac Corp. is sponsoring a $302.3 million securitization of payments from a pool of agency-eligible mortgage loans—a highly attractive sector to investors—and will sell the notes to investors through the PMT Loan Trust, series 2026-CNF1.
The pool is composed primarily of first-lien, 30-year, fixed-rate home loans that are fully amortizing and which were originated under general qualified mortgage designation, according to analysts at Kroll Bond Rating Agency.
PMT Loan Trust, series 2026-CNF1 will issue the notes through 18 tranches of notes. Super senior notes, primarily, receive AAA ratings from KBRA, said, adding that senior support tranches receive AA+ ratings.
In terms of the deals' capital structure, PMT 2026-CNF1 will repay noteholders following a sequential, shifting-interest structure, the rating agency said. Six subordinate classes support the senior notes and primarily provide credit enhancement to the notes, KBRA said.
For the subordinate tranches, the class B1, B2, B3, B4, and B5 received AA-, A-, BBB, BB and B+, respectively.
Co-lead managers and joint bookrunners on the deal, which is slated to close on January 30, are
KBRA also noted that Santander US Capital Markets were among a group of initial purchasers, which includes
Notes have a final maturity of January 2057, KBRA said.
In other details of the loan pool, which contains 576 mortgages, the loans have an average balance of $524,975. The pool also appears to be well diversified, with the aggregate top five balances accounting for 1.4% of the pool, the rating agency said.
On a weighted average (WA) basis, collateral loans have a coupon of 6.21%, and an original term of 359 months, KBRA said.
The borrowers' credit profile also looks strong, with an original FICO score of 767, and an original loan-to-value (LTV) of 75.4%. Just 13.2% of underlying borrowers are self-employed, with a WA annual income of $218,191, and liquid reserves of $219,076, KBRA said.
