RWT Holdings is preparing to float $471.5 million in mortgage-backed securitization debt, secured by a pool of 390 prime, jumbo residential mortgages and issued through the Sequoia Mortgage Trust.
The series 2025-4 transaction will issue a series of super senior, senior support and class B notes, with coupons ranging from 6.0% on the A1 notes through 0.14% on the B1X tranche, according to analysts at the Kroll Bond Rating Agency.
Sixty-seven percent of the loans were underwritten to agency guidelines, while 33.0% were underwritten with full documentation, KBRA said. Also, a wide range of mortgage lenders originated the loans, with United Shore Financial Services accounting for 14.1% of the pool, and Rocket Mortgage representing the next largest portion, at 11.6%. Fairway Independent Mortgage, CrossCountry Mortgage and CMG Financial rounded out the top five originators, with 6.8%, 5.3% and 5.3% of the pool, respectively. After that, a litany of 85 lenders is described as "other."
Sequoia Mortgage's note sale is slated to close on April 29, with
The notes will get credit enhancement from balances on the subordinate bonds, which are permitted to amortize, KBRA said.
Normally, the initial credit enhancement percentage on a rated note class needs to be greater than the expected loss percentage of the rating level assigned to that class. That leakage of principal to the subordinate classes occurs unless other structural features, like a credit enhancement floor, reallocates principal to more senior bonds.
Most pool characteristics on the series 2025-4 notes remain the same as the series 2025-3, KBRA said.
On average, mortgages have a balance of $1.2 million, with a weighted average (WA) coupon of 6.68% KBRA said. There is also modest leverage on the mortgages, because on a WA basis, their original loan-to-value ratio was 72.0%, the rating agency said.
Borrowers have an annual income of $559,932 on a non-zero WA basis, liquid reserves of $769,095, and a WA FICO score of 781.
KBRA assigns AAA to the super senior and senior support notes; AA- to the B1 and exchangeable notes; A- to the B2 and exchangeable notes; BBB- to the B3 notes; BB- to the B4 notes- and B- to the B5 tranche.
