Angel Oak Capital Advisors on Friday closed on a $231 million non-qualified mortgage-backed securitization that marked the first non-agency MBS deal qualify as a social bond offering by primarily pooling loans for underserved U.S. homebuyers.
Angel Oak Mortgage Trust 2021-2 – made up of 466 loans with average balances of $456,728, an average borrower FICO of 740 and a loan-to-value ratio of 73% – was constructed to meet social-bond principles of the International Capital Market Association (and confirmed in a second-party opinion from the Institutional Shareholder Services ESG corporate governance firm).
The deal was constructed under Angel Oak’s social-bond framework, in which the firm intends to use the proceeds to help finance residential loans for borrowers with non-standard sources of incomes, self-employed individuals, first-time and down-payment assistance homebuyers and borrowers with problem-credit issues.
The social bond framework plan falls within Angel Oak’s ESG (environmental, social and governance) initiative that was launched in 2019.
The deal priced with six classes of senior, mezzanine and subordinate term notes paying principal and interest, as well as two tranches of notes only entitled only to excess cashflow and servicing proceeds. The $175 million Class A tranche atop the capital stack received AAA ratings from Kroll Bond Rating Agency and Fitch Ratings.
The deal represents the 23rdprivate-label MBS deal sponsored by Angel Oak, which has been securitizing non-qualified loans since 2015.
