Rialto Capital is in the market with $147 million of bonds backed by nonperforming commercial and residential mortgages, according to a presale report published by Kroll Bond Rating Agency.

The deal, RIAL Series, 2014-LT6, is a liquidation vehicle that monetizes recoveries from 1,032 repossessed properties, nonperforming loans and a few performing loans with an aggregate unpaid principal balance of $524.5 million.

The properties were acquired for $196.5 million between February 2011 and December 2012 from eight regional lenders. Some 83% of the assets in this transaction were previously securitized by Rialto last year in a transaction dubbed RIAL 2013-LT2 transaction, which is expected to be paid in full on Sept. 22. And 32.8% of the assets are being rolled over a second time, having originally been securitized in the RIAL 2012-LT1 transaction, nearly all of which was resecuritized into RIAL 2013-LT2

The properties are a mix of commercial and multifamily (62.4%), land (22.3%), residential (12.8%) and other non-real-estate collateral (2.5%).

The securitization trust will issue $116.4 million of class A notes that Kroll expects to rate BBB-. They have with a final expected payment date of September 2024. There are also $30.9 million of class B notes and $49.1 million of equity interest, neither of which are rated by Kroll.

Interest on the notes is deferrable for one year.

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry