Moody’s Investors Service, Kroll Bond Ratings and Fitch Ratings assigned 'Aaa'/‘AAA’/'AAA' ratings respectively to the class A notes issued by Redwood Trust’s $398 million residential mortgage-backed securitization deal.

The deal is a securitization of prime residential mortgage loans to individuals secured by property in the U.S. The transaction consists of two mortgage pools supporting two groups of senior classes, but sharing one set of subordinate classes.

The ratings agencies assigned ‘AAA’/ 'Aaa' ratings to the $151.6 million, class 1-A1 notes; and the $217.18 million, class 2-A1 notes. Moody’s and Kroll will not rate the $10.14 million class B-1 notes, the $6.7 million class B-2 notes, the $4.57 million class B-3 notes, the $3.38 million class B-A notes or the $4.17 million class B-5 notes. All notes are structured with a final maturity date of January 2043. Barclays Capital is lead underwriter in the deal.

Like Redwood’s recent securitized pools, this deal is backed by high-quality prime mortgages. The weighted average FICO at 760, is high, and the weighted average LTV at 67.79% is low. Moody’s said in a presale report today that the collateral pools are made of loans of high credit quality. Pool 1 includes a combination of mortgages with terms of 30-year or less as well as adjustable-rate mortgages. Pool 2 is comprised of 100% 30-year fixed-rate mortgages.

“Overall, this pool is strong by historical standards and similar to recent Redwood transactions,” Moody’s reported.  “However, the loans in this pool are subject to more risk layering and their leverage is higher than that of loans in the pools Redwood securitized between 2010 and early 2012.”


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