Woodward Capital Management is sponsoring a $599.9 million securitization of revenue from a pool of newly originated and closed-end, second-lien mortgages. The notes will be issued through the RCKT Mortgage Trust 2024-CES5.
Asset Securitization Report's deal database estimates yields will range from 5.75% on the A1A notes to 6.55% on the M1, all priced on the three-month, interpolated yield curve.
The pool contains 7,427 loans that Rocket Mortgage originated and underwrote in alignment with ability to repay rules. Also, the pool is made up of fully amortizing, fixed-rate mortgages with 10-year and 20-year terms. The transaction will repay interest and principal to noteholders sequentially, starting with class B3 through the class A1A notes, according to KBRA analysts.
The two most senior notes, A1A and A1B, will be repaid on a pro rata basis, while the rest of the notes will be paid sequentially. Also, all notes except for the subordinate B3 notes are initial exchangeable, according to KBRA.
The notes enjoy credit enhancement levels ranging from 20.00% on the AAA-rated, A1A tranche to 1.50% on the B2 notes. Excess spread is among the credit enhancement tools in place, providing 3.33% in coverage to the notes.
Across the pool of 7,482 loans, the collateral has an average loan balance of $80,782. On a weighted average (WA) basis, the assets have an original FICO score of 738, an original loan-to-value ratio of 18.2% and borrowers have a mean income of $118,792.
The pool is also very diversified, with California accounting for just 16.4% of the overall pool. Florida follows as the second-largest state, with 8.3% of the pool and Georgia ranked third with 5.4%.
KBRA assigns AAA to the A1A and A1B notes; AA+ to the A2 notes; BBB+ to the M1 notes; BB+ to the B1 notes; and B+ to the B2 notes.
