Fitch Ratings and Kroll Bond Rating Agency have released presale reports on the fifth Sequoia/
Fitch issued expected ratings and Kroll issued preliminary ratings for the residential MBS deal, Sequoia Mortgage Trust 2013-5, with top ratings of AAAsf assigned to the four senior classes of the transaction. Two of the senior classes are interest-only classes.
As is typical for Sequoia/Redwood deals, Fitch also rated some of the subordinate classes, which Redwood typically retains. Four subordinate classes received ratings ranging from a slightly lower AAsf investment grade rating to a speculative grade BBsf. Fitch left one class unrated.
Compared to past Sequoia/RWT deals, Kroll found notable “significantly higher loan seller and geographic diversity than prior KBRA-rated SEMT transactions.”
All the originators involved have limited nonagency performance histories that Fitch said are “partially mitigated by…100% third-party diligence conducted on these loans that resulted in immaterial findings.”
The report also shows that the deal’s California concentration, which has been a concern in past Sequoia/RWT deals, has dropped to its lowest level ever at 37.6%.
“The pool is sufficiently diverse that no geographic concentration adjustment was warranted,” according to Kroll.
Redwood/Sequoia remains the most consistent issuer of JMBS in the post-crisis market.
