A pool of 769 first-lien, line of credit (LOC) loans will secure about $315.6 million in asset-backed securities (ABS) from the PRMI Securitization Trust, series 2024-CMG1.
Sponsored by PRMI Capital Markets, the deal will sell investors a series of A, M and B notes through seven tranches that all have a legal final maturity date of July 2054, according to Fitch Ratings analysts. Seasoned and non-seasoned open home equity lines on residential properties will provide collateral to the notes, according to Fitch and DBRS Morningstar, which also rates the notes.
Both the interest and the principal waterfalls have a sequential payment structure, and losses are allocated in reverse, thanks to subordination in the capital structure, Nomura Securities International is the initial note purchaser, according to DBRS, noting that the deal is expected to close on June 28.
CMG Mortgage originated the loans, while Northpoint Bank is on the transaction as servicer, according to DBRS.
The notes will be priced against the Secured Overnight Financing Rate (SOFR), at spreads that are yet to be determined, Fitch said. But the rating agency did note that total credit enhancement levels range from 12.15% on the A1 notes to 0.75% on the B2 notes, the rating agency said.
Fitch examination determined that the underlying assets, all of which are current, had eight months of seasoning. None of the loans registered a delinquency in the past 24 months, and none had received a modification prior to the May 31 cutoff date, Fitch said.
On average, the LOC asset have a $541,779 credit line and an average coupon of 8.72%, On a weighted average (WA) basis the loans have an average FICO of 765, and an issuer original cumulative loan-to-value (CLTV) ratio of 73.24, DBRS said.
DBRS assigns ratings of AAA to the A1 notes; AA to the A2 notes; A to the A3 notes; BBB to the M1 notes; BB to the B1 notes and B to the B2 notes. Fitch Ratings, meanwhile, assigns the same ratings to the notes.
