In a deal expected in mid-June, the Freddie Mac STACR REMIC Trust 2022-DNAS is expected to issue about $1.4 billion in mortgage-backed securities (MBS) to investors. Mortgages on an array of property types, secured by a pool of first-lien, fully amortizing mortgages.
U.S. Bancorp Asset Management is the transaction’s investment manager. The deal will issue securities through a senior-subordinate structure, according to S&P Global Ratings.
The notes are slated to mature on June 25, 2042, and the mortgages are financing property types such as one- to four-family residences, planned unit developments, cooperatives and manufactured housing, the rating agency said.
Mortgages are sourced from a diverse pool of sellers. The top five sellers account for a combined 36.4% of mortgages in the pool, by balance, and the remaining sellers account for 63.5% of the mortgages in the pool. Among the top five sellers, United Wholesale Mortgage has the largest percentage, accounting for 8.9% of the pool.
United Wholesale Mortgage is also the largest servicer in the deal, representing the same amount, statistically. S&P did point, out, however, that United Wholesale Mortgage is not on its select servicer list.
Ratings on the transaction range from ‘A-’ on the $519 million, M-1A mezzanine notes to ‘BB-’ on the $125 million series of M-2 class notes, and also include ‘B’ on the $82 million B-1I notes, according to S&P.
Coupons will be benchmarked to the Secured Overnight Offered Rate (SOFR). Also, similar to recent STACR transactions this year, starting and minimum enhancement levels for the STACR 2022-DNA5’s senior class are higher than issuances in prior years.
A larger M-1 issuance that is split into M-1A and M-1B classes explains this, and S&P points out that the structure could lead to extended weighted average lives of the rated notes, compared with 2021 and earlier issuances.
