Securitization

Scrutiny will be particularly strong on the results of the $70 billion five-year auction on Wednesday because over 60% of foreigners' holdings are concentrated at that maturity or less.

The capital structure includes amortization triggers based on cumulative net loss levels and material modified loan ratios.

The sponsor launches the deal after a period of increased originations in marine and recreational vehicle loans, will secure the notes.

The notes benefit from various levels of debt service coverage ratio (DSCR) triggers that help support repayment.

Jeffries is preparing to sponsor $143.2 million in securitized bonds backed by unsecured consumer loans underwritten largely through income verification.

As servicer, Rocket Mortgage will not provide advances of delinquent principal and interest. Doing so runs the chance of intermittent cashflows to the trust.

The structure includes credit enhancement from overcollateralization representing 16.4% of the pool balance.

Principal payments, will be repaid through three periods of a full turbo period, a non-turbo period and another full turbo period before an amortization trigger event.

The deal has an extensive capital structure, which is expected to repay investors sequentially, with notes enhanced by subordination.

Cross 2025-H3 has moderate leverage, according to KBRA, with a weighted average (WA) loan-to-value ratio of 72.3%, and a debt-to-income ratio of 33.5%.