A large portfolio of 2,246 fixed home equity investment agreements (HEI) will secure $275 million in asset-backed securities (ABS) coming to market through the Splitero Trust 2026-1, in a deal sponsored by Splitero and BOAC HOWL Splitero Securitization Holdings.
The notes will be sold to investors through six tranches, of class A, B and PT notes, according to analysts at Morningstar DBRS. The deal is expected to close on May 27, with Barclays, Cantor Fitzgerald and Nomura Securities International as managers.
All the offered notes have a stated maturity date of June 2056, according to DBRS.
The notes will repay investors sequentially on a senior-subordinate basis, DBRS said.
San Diego, Calif.-based Splitero, offers homeowners a fixed amount in exchange for giving the company an option to purchase a percentage interest of ownership in and to the property. The lump sum carries no interest or monthly repayment obligation, and the homeowner can use the proceeds for whatever they like, DBRS said.
The HEI contracts are backed by first, second and third liens on residential properties with original terms of up to 30 years, the rating agency said.
The cumulative advance rate on the notes include range from 68.5% and 87.7% on the A1 notes and A2 and A notes, respectively, DBRS said. On the subordinate notes, rates are 93.0% on the B1 notes and 100.0% on the B2 and PT notes.
Ultimately, the homeowner's payment obligation is based on the property's market value on settlement and Splitero shares in a percentage of the total value of the property at that time, DBRS said.
While Splitero originated the contracts, RoundPoint Mortgage Servicing is the subservicer and backup servicer on the deal, the rating agency said.
DBRS assigns ratings ranging from (P) A (low) (sf) on the class A-1 notes to (P) B (sf) on the class PT notes
