Springleaf Financial, the subprime lender controlled by Fortress Investment Group, is back in the market with a $875.499 million mortgage-backed securitization, according to a presale report from Standard's and Poors.
The transaction, Springleaf Mortgage Loan Trust 2013-2, is the company's second RMBS deal this year.
Merrill Lynch, Pierce, Fenner & Smith, and Credit Suisse Securities are the underwriters on the deal which is expected to close July 9, 2013.
It features a $511.78 million senior class of notes rated 'AAA' by S&P; four tranches of mezzanine ntoes totalling $245.09 million rated 'AA', 'A+', 'A-', and 'BBB, respectively; a $61.98 million subordinate class of notes rated 'BB'; and a $56.63 million class of notes rated 'B'. The remaining 13 subordinate and interest only classes were not rated. The overcollateralization C class and the residual class were also not rated.
The collateral backing the notes consists of seasoned first-lien, fixed- and adjustable-rate residential mortgage loans secured by one- to four-family residences, condominiums, manufactured housing, land, planned unit developments, mixed use properties, and packages of multiple real properties to subprime borrowers, according to the presale report.
The top three origators of the pool are American General (53%), Wilmington Finance (27%), and Equity One Co. (5.5%).
S&P said the collateral in the latest deal is mostly similar to Springleaf's two prior subprime mortgage securitizations: the pool's typical borrower has an updated FICO score that is subprime, and the properties and outstanding loan amounts are typically low.
Unlike the previous transactions, however, the latest deal is backed by loans to borrowers that have missed payments in the last 12 months.
However, the transaction benefits from a diverse geographical collateral pool, excess spread that builds overcollateralization by paying down the senior-most class of notes outstanding on any payment date, an interest reserve fund to cover interest shortfalls, and strong master servicer in Wells Fargo.
