A pool of 574 agency-eligible, conforming mortgage loans that are fully amortizing and which are mostly fixed rate, will collateralize $292.8 million in residential mortgage-backed securities (RMBS), to be sold to investors through the PMT Loan Trust, series 2025-CNF2.
The deal structure will repay investors through a senior-subordinate and shifting interest structure, where subordinate notes will receive principal while senior notes are outstanding, according to analysts at Kroll Bond Rating Agency.
Notes have a final maturity date of December 2056 on the deal, according to KBRA, which is slated to close on December 30. BofA Securities is the structuring lead and joint bookrunner.
PMT 2025-CNF2 is not required to provide advances of schedule interest and principal on loans that are delinquent by 120 days or more, KBRA said. This reduces loss severity compared with transactions without that feature. The unadvanced delinquent interest will reduce the available funds relative to the interest payment amount, however, which could result in interest shortfall amounts or principal write downs to the most subordinate classes, KBRA said.
The pool of qualified mortgages have an average loan balance of $510,165, where borrowers have an original FICO score of 770, and an original loan-to-value ratio of 74.7%.
Borrowers have a median income of $177,816, with $268,133 in liquid reserves on a weighted average (WA) basis.
Geographically, the pool is diverse, with California accounting for the largest concentration of mortgage assets, 18.1%.
Assigned KBRA ratings includes AAA on the A4 through A20 classes; AA- on the B1 notes; BBB- on the B3 notes; BB- on the B4 notes; and B on the B5 notes.
