Securitization

Sales of bonds earmarked for supplemental coverage of large windstorms, earthquakes and other events totaled $17.7 billion, up 7% from the previous record set a year ago.

The residential market is expected to face challenges from stubbornly high mortgage rates and limited supply in 2025, particularly after Fed Chair Jerome Powell's comments on Wednesday indicating fewer rate cuts are coming.

A Congressional Budget Office report updating one from four years ago finds 60% of its 250 scenarios will result in the Treasury getting fully repaid, up from 12%.

The deal mitigates mortgage-pool risk with CLO credit strengths

Unlike some recent RMBS deals, both exclude riskier interest-only loans and those supporting investment properties.

Top banks are underwriting the deal, but most of the securitization's loans lack documentation.

The proposal is one of several that aims to address difficulties managing early buyouts from mortgage-backed securities pools.

Underwriting methods have been steadily shifting to traditional full documentation, which accounts for 13.3% in the VERUS 2024-9, KBRA said, its largest share since VERUS 2024-6.

The economist, who runs Roubini Macro Associates, is positioning for a curve steepener, a popular Treasuries trade where the gap between long- and short-dated yields widens.

Freddie Mac is offering a municipal bond option for investors in its ML multifamily securitization offerings starting with its December issuance.

The notes benefit from credit enhancement levels of 30.45%, 24.3%, 13.8%, 8.65%, 5.00% and 2.05% on the A1, A2, A3, M1, B1, B2 and B3 tranches, respectively.

Private-label securitization volume increased 75% this year versus 2023; conditions are right for that to continue, KBRA said.

The rise of private credit has had a surprising side effect: it's made borrowing cheaper for companies in other high-yield markets, and has probably made a key barometer of credit risk less accurate.

Fitch Ratings said Tesla Finance enters the residential solar finance ABS arena with underlying loans that have the highest WA FICO score presented to it for a rating.

The REIT was successful in achieving all of its near-term goals, its CEO said in an earnings call.

The notes receive credit enhancement from overcollateralization, and an initial reserve.

Mortgage bonds get hit hard when there's growing uncertainty about the direction of rates, due to the election, because their returns depend so much on it.

The deal will repay investors on a hyrid pro rata, sequential basis. Credit enhancement ranges from 51.7% on the class A1A notes to the 2.25% on the class B2 notes.

This is the first RTL transaction for Roc360 Real Estate Income Trust, the deal's sponsor, in three years. Also, it is Roc360's first rated RTL transaction.

Underlying borrowers have accumulated significant amount of home equity in their homes, to a weighted average (WA) original cumulative loan-to-value (CLTV) ratio of 69.5%.