Aspire Sponsor's latest residential mortgage-backed securities (RMBS) deal, set to raise $413.7 million, is backed by a pool of 742 primarily non-prime mortgages, and almost all are fixed-rate.
Borrowers of the underlying loans in SPIRE 2026-5 had blemished credit histories, and lenders verified income through bank statements and other alternative underwriting methods, according to Kroll Bond Rating Agency.
Rocket Mortgage originated almost one third of the pool (28.3%) and Select Portfolio Servicing would service all the loans in the pool, according to KBRA.
The structure contains seven tranches of class A notes, including two tranches for first cash flow and last cash flow, both initially exchangeable, KBRA said.
All seven senior tranches will be repaid on a pro rata basis, the rating agency said, while the mezzanine and subordinate tranches will follow a sequential structure.
Almost all the A1 tranches of notes, except one, benefit from credit enhancement levels of 21.05%, KBRA said. Meanwhile the A-1A notes benefit from 31.05% in credit enhancement, the rating agency said.
Four of the A1 tranches will pay investors 5.68%, KBRA said, while classes A2, A3 and M1 benefit from coupon levels of 5.83%, 5.93% and 6.13% respectively.
Barclays Capital, Morgan Stanley, Mizuho Securities and BofA Securities are initial note purchasers, KBRA said.
The deal structure also includes a 90-day stop advance provision that will prohibit the transaction from advancing interest and principal on loans that are delinquent by more than 90 days.
On average, the loans have an average balance of $557,641.
Despite the non-prime nature of the underlying loans, they have an original weighted average (WA) loan-to-value (LTV) ratio of 71.3%, KBRA said. Also, borrowers have a median income of $282,922 and liquid reserves of $544,182 on a WA basis.
KBRA assigns AAA ratings to all the A1 notes; AA and A to the A2 and A3 notes; BBB to the M1 notes; and BB and B to the B1 and B2 notes.
