Deutsche Bank

The deal comes about 18 months after Maritime Partners completed its securitization of Jones Act shipping business revenue, raising $235.3 million.

GFORT 2024-4 has an interest rate mismatch between the assets and the issued notes, which could reduce excess spread in the trust to the point where it is negative.

Yield-hungry insurers, banks and exchange-traded funds fueled demand this year while a wave of redemptions crimped net supply.

The 144A deals close within a week of each other and both have eight-year maturities. Series 2024-P3 has four class A tranches compared with 2024-N3's three class As.

Among the credit challenges, is the lack of amortization on the loans, and the loans are heavily concentrated among states and MSAs.

Yields on the notes are expected to range between 6.36% on the AA- and Aa2 notes--as rated by KBRA and Moody's Ratings, respectively–to 10.08% on the BB notes, as rated by KBRA.

The current transaction will sell the most in securitized bonds since the 2022-1 series came to market with $850 million in notes.

All four of the class A tranches benefit from total initial hard credit enhancement of 13.80%, while the B and C classes of notes are covered by 10.6% and 6.0% in initial hard credit enhancement.

Known for subprime financing, the sponsor has been making inroads lending to near-prime customers in the last couple of years.

There are four risk events that could stop cash flow into SMB 2024-R1's deal—missing overcollateralization targets, a stymied principal distribution and the deals do not exercise an optional clean-up call.