VMC Asset Pooler's third sponsored securitization of the year offers $690.5 million in residential mortgage-backed securities (RMBS), one of the smaller transactions the platform has offered investors in several months.
Verus Securitization Trust, series 2026-3, will issue about 13 tranches of notes, mostly classes A1-A3, a mezzanine tranche B1-B3 tranches, collateralized by a pool of first-lien mortgages, including fixed- and adjustable-rate, according to analysts at Fitch Ratings and Morningstar DBRS.
The collateral pool consists of 1,318 mortgages, aggregated by Invictus Capital Partners from originators that include NewRez, and each accounts for less than 10% of the mortgage loans.
A significant portion of the pool, 34.9%, were underwritten through debt service coverage ratio methods, using rental income to allow borrowers, likely investors, to qualify for financing.
After an expected March 13 closing date, the notes have a final scheduled payment date of March 2071, Fitch and DBRS said.
Barclays Capital leads the group of initial note purchasers, which includes ATLAS SP Securities, BofA Securities, J.P. Morgan Securities and Morgan Stanley.
The A1A tranche will issue the bulk of notes, $200.4 million, which are a mix of fixed rated notes and floater classes, the rating agencies said. The A-1F is a floater class expected to pay a coupon of 115 basis points over the Secured Overnight Financing Rate (SOFR), Fitch said.
There are also two inverse floater classes—A1|O1 and A1|O2—they will pay a rate of at least 6.50% minus the A1F note rate, Fitch said.
Credit enhancement levels on the notes include 35.5% on the A1A notes and 25.5% on the A1B through A1F notes. After that, credit enhancement levels range from 20% on the A2 notes to 2% on the B2 notes.
Verus 2026-3's gains credit enhancement from subordination, analysts said. Notes will repay through a combination of pro-rata on the senior notes and sequentially on the mezzanine and subordinate notes.
DBRS assigns ratings ranging from (P) AAA (sf) on the A1A notes to (P) B (high) (sf) on the B2 tranche. Fitch's ratings range from AAA on the A1A to B- on the B2 class.
