A pool of 5,920 closed-end and second-lien mortgages that Woodward Capital Management purchased from Rocket Mortgage will secure $549.8 million in mortgage-backed securities.
Notes will be sold to investors through the RCKT Mortgage-Backed Notes, series 2026-CES7, and have a legal final maturity of July 2056, according to analysts at Kroll Bond Rating Agency and FitchRatings.
The deal, supported by a pool of primarily single-family homes, is slated to close on July 22.
Fitch estimates that the deal, RCKT 2026-CES7, has a final probability of default of 19.1% at the 'AAAsf' rating stress level. The rating agency's final loss severity in that rating level is 98.1%, the rating agency said.
Coupons include 5.61% on the A1A and 5.72% on the A1B tranches, both rated AAA from KBRA and Fitch Ratings, according to the rating agencies. Below that, coupons range from 5.85% on the AA+-rated notes to 8.04% on the notes rated B+, KBRA said.
Most classes of the notes, including A, M and B, are initially exchangeable, according to KBRA. The super senior and senior support tranches notes will repay investors on a pro rata basis. The A2 through B3 notes repay investors sequentially, KBRA said.
The senior notes,A1A, A1B, A2 and A3 benefit from credit enhancement levels of 20.00%, 17.30%, 12.95% and 8.40%, respectively.
On average, the loans have a balance of $92,887, with a weighted average coupon (WAC) of 8.96%. Also, the loans have an original FICO score of 744, and an original cumulative loan-to-value (CLTV) ratio of 65.5%, according to KBRA.
