Radian Mortgage Capital floats $348.8 million in mortgage-backed notes

Radian Mortgage Capital is preparing to issue $348.8 million in mortgage-backed securities (MBS) through the Radian Mortgage Capital Trust, RMCT 2024-J1, secured by a pool of fixed-rate mortgages.

Amid a housing market clouded over with high interest rates and unsustainably elevated home prices, RMTC will issue the notes through a series of class A and B notes, and all tranches will mature in November 2054, according to a pre-sale report from Fitch Ratings.

Three hundred, fifty-nine loans compose the collateral pool, and they have an average balance of $971,614, said ratings analysts at Kroll Bond Rating Agency. Several of the class A tranches are exchangeable, while B1 through B3 notes are exchangeable, the rating agency said.

The lineup of notes includes super senior tranches that will be repaid sequentially; the A21 and A23 tranches, and B1 through B3 that pay interest only; a floating-rate A25 tranche; and three subordinate tranches, B4 through B6.

Credit enhancement ranges from 15.0% on the super senior notes to 0.70% on the B4 note, among the subordinate tranches, KBRA said.

On a weighted average (WA) basis, the assets have an original loan to value ratio of 74.7%, and lenders have reserves of $457,946, according to Fitch Ratings.

Goldman Sachs, J.P.Morgan Securities, BMO Bank, Raymond James & Associates and Stifel, Nicholas are initial note purchasers, KBRA said. Asset Securitization Report's deal database notes that Goldman, JPMorgan and BMO will be managers on the deal. Also, yields include 6.0% on the A4 notes and 6.1% on the A8 notes. Other yields include 5.8% on the A14 notes; 6.1% on the A16 notes; 6.0% on the A22 notes; and 6.2% on the A24 notes, according to the database.

KBRA assigns ratings of AAA to the A5 through A25 tranches; AA- to the B1 notes; A- to the B2 notes; BBB to the B3 notes; BB- to the B4 notes and B to the B5 notes.