A pool of varied mortgages, ranging from investor-only, business purpose multifamily properties to single-family residences, will provide collateral for a $191.6 million mortgage-backed securities (MBS) from the Visio 2023-2 Trust.
Visio will repay investors through a hybrid pro-rata, sequential structure where senior notes will be repaid on a pro rata basis, and the subordinate notes will repay investors sequentially, according to ratings analysts from S&P Global Ratings.
One class of notes, the XS class, will receive monthly excess cash flow up to the aggregate cap carryover for the class A notes for the appropriate distribution date. It will also pay any unpaid carryover amounts sequentially to classes A-1, A-2 and A-3 notes and to the mezzanine class cap carryover amounts, if applicable, according to S&P.
All senior notes in the structure are fixed rate, while the mezzanine and subordinate classes will have an interest rate based on a net weighted average coupon (WAC), the rating agency said.
Visio-Beach Point Mortgage Trust is sponsoring the deal, according to S&P. Barclays Capital, ATLAS SP Securities—a division of Apollo Global Securities—and Nomura Securities International. BSI will service the notes, the rating agency said.
The A-1, A-2 and A-3 notes will benefit from credit enhancement levels of 38.6%, 30.1% and 19.3%, respectively. The mezzanine class benefits from 13.3% in credit enhancement, while enhancement on the subordinate notes remain in the single digits.
Visio has a loan count of 713, with an average balance of $268,730. On a weighted average (WA) basis, the loans have an original cumulative loan-to-value ratio of 70.6%, a FICO score of 743, a current rate of 8.1% and seasoning of just two months. Single-family unites, including planned unit developments and townhouses, account for 64.1% of the collateral pool, while two-to four-family homes amount to 29.9%, the rating agency said.
S&P expects to assign ratings of 'AAA', 'AA' and 'A' to the A-1, A-2 and A-3 notes; 'BBB' to the mezzanine notes; and 'BB-' and 'B-' to classes B-1 and B-2.
