Rocket Mortgage is preparing to raise $392.9 million in mortgage-backed securities (MBS), to be issued through the RCKT Mortgage Trust, 2025-CES3,with underlying assets that have a materially stronger credit profile than previous CES transactions.
Kroll Bond Rating Agency and Fitch Ratings say the transaction will sell notes to investors through eight tranches of notes. They all have the same legal final maturity, March 2055.
The deal has four class A tranches, say KBRA and Fitch. All the underlying assets were originated using full documentation, and they have a weighted average (WA) FICO score of 748, according to Fitch.
KBRA assigns AAA ratings to the A1A and A1B notes; AA+ to the A2 notes; and A+ to the A3 notes, according to KBRA. The M1, B1 and B2 notes have ratings of BBB+, BB+ and B+, respectively.
Fitch assigns AAA to the A1A and A1B notes; AA to A2 and A to the A3 classes. Otherwise, the M1, B1 and B2 notes get ratings of BBB, BB and B, respectively.
ASR's database says the coupons range from 5.45% on the A1A notes to 7.98% on the B2 notes.
Classes A1A, A1B, A2 and A3 benefit from credit enhancement levels of 20.0%, 15.0%, 11.1% and 7.6%, respectively. RCKT Mortgage Trust's uses a repayment structure that ensures the A-1A and A-1B notes will always be paid pro rata. Meanwhile, the principal to the rest of the notes will be paid sequentially, contributing to the deal's credit enhancement.
RCKT Mortgage Trust's notes also benefit from excess spread representing about 3.26% of the pool balance, according to KBRA.
Some 21.5% of the pool, made up of 4,275 mortgages, are considered non-qualified mortgages, according to KBRA, which is a lower percentage compared with other series from the platform, according to KBRA. Almost the entire pool of mortgages will fund primary residences, and were underwritten using full documentation, according to rating agencies.
The assets have an average balance of $91,918.
