The 2025A bonds will have parity with all senior bonds that have been previously issued, and any senior bonds issued in future deals.

The assets' legal isolation means that the NCUA exercising its powers in a way that would reduce payments to the notes is a remote possibility.

Debt markets globally were roiled this week as the yield on the 30-year Treasury rose to almost 5% before easing in the past two sessions.

The percentage of larger loans in HGVT-2 is 20.08%, S&P said. While that is lower than the 23.2% seen in the previous deal, it is still too high.

The entire pool was originated using agency underwriting, with PennyMac being the largest originator, and accounting for 66.1% of the mortgage loans.

A credit analyst manually reviews the pool's underwriting decisions, instead of just leaving it all to automation.

The deal faces a few upfront credit challenges, including the fact that the collateral's credit quality has weakened.

Certain provisions in the deal allow for changes in the collateral pool, including allowing for discretionary substitutions of up to 2.0% of the number of properties.

There is a liquidity reserve account that will be fully funded to its required amount when the deal closes.

After passing the Federal Reserve's stress tests with high marks, large banks announced dividend increases. In some cases, they also said the Fed had conceded that certain prior calculations needed to be revised.