Credit Suisse Plans to Bring Another RMBS to Market

Credit Suisse has put another residential mortgage-backed securities deal in the pipeline, adding to evidence that private label RMBS issuance interrupted by an unexpected rate hike earlier this year is getting back on track.

The deal, CSMC Trust 2013-IVR5, is a little over $290 million in size, according to a Standard & Poor’s presale report.

Standard & Poor’s has issued preliminary ratings on 26 of the transaction’s classes, including those with notional amount of securities in them, and left three unrated. Twenty-three carry S&P’s top investment grade rating, two carry lower investment-grade ratings of single-A (sf) and triple-B (sf). One class received a speculative grade double-BB (sf) rating.

The collateral pool purchased through Credie Suisse’s DLJ Mortgage Capital Inc. “has credit characteristics that are substantially stronger than our archetypical pool.”

Risks typical of recent jumbo securitizations such as California concentrations (50%) and the inclusion of small originators that may be financially unable to repurchase loans are present in the deal. The S&P report says “DLJ will be obligated to repurchase loans on their behalf” if they are unable to.

RPM Mortgage, the only S&P-ranked originator in the transaction, accounts for about 8% of the loans in the deal. S&P ranks it as “above average.” Other originators contributing notable percentages of loans to the transaction are Guaranteed Rate (9% plus), BofI Federal Bank (8% plus) , Sierra Pacific Mortgage Co. Inc. (8% plus), Cole Taylor Bank (5% plus) and Skyline Financial Corp. (5% plus).

Representations and warranties are in line with previous CSMC Trust 2013-IVR deals. The transaction documents contain provisions to mitigate tail risk.