VMC Asset Pooler, the affiliate of Invictus Capital Partners, the alternative asset manager focused on real estate, is preparing to issue $612.3 million in residential mortgage-backed securities (RMBS), through the Verus Securitization Trust 2024-9.
The collateral pool consists of 1,289 residential mortgages, sourced from various lenders, none of which accounts for more than 10% of the collateral pool, according to analysts at Kroll Bond Rating Agency. Generally, the lenders used moderate original combined loan-to-value ratios and non-traditional income documentation to underwrite the loans, KBRA said.
New Rez and Lima One Capital will service the loans, according to the rating agency.
J.P.Morgan Securities is the lead underwriter, according to S&P Global Ratings, which also assessed the notes. KBRA, meanwhile, says
While lenders in the pool used alternative documentation to screen a majority, or 54.3%, of the underlying assets, that accounted for a smaller percentage than the previous deal, VERUS 2024-9. Also, VERUS asset securitization pools have seen a steady reduction in alternative documentation methods since the 2024-6 transaction, according to KBRA.
The next largest underwriting method has been debt-service coverage ratio (DSCR) at 30.4%, and that has been shrinking, too.
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 rating agency said.
The notes are fixed, S&P says, adding that there is a step-up feature on the senior classes' coupons. On each payment date beginning in January 2029, the A1, A2 and A3, will receive the sum of VERUS 2024-9's fixed coupon, plus 1.00%. This might motivate class XS noteholders to exercise optional redemptions to tidy up the transaction, the rating agency said.
VERUS 2024-9 will repay noteholders through a mixed method. The senior notes will repay on a pro rata basis, while the mezzanine and subordinate tranches will repay sequentially, S&P said.
S&P assigns AAA, AA and A to the A1, A2 and A3 notes, respectively; BBB- to the M1 tranche; and BB- and B- to the B1 and B2 tranches, respectively.
KBRA assigned AAA, AA+ and A+ to the A1, A2 and A3 notes; BBB+ to the M1 notes; and BBB- and B+ to the B2 notes, respectively.
