A Securities & Exchange Commission disclosure by Standard & Poor’s reveals that Fortress Investment (FIG) is bringing a new residential mortgage-backed securitization to market, via subsidiary Springleaf Financial.
The “17g-7” SEC form reveals the reps and warranties of an RMBS structure. An S&P presale report says the deal will likely price by April 20, but that could happen as early as midweek according to information on Bloomberg.
Springleaf Financial is a loan provider previously known as American General Finance, until Fortress bought 80% of the company in 2010 from American International Group (AIG).
The SEC disclosure is a clear indication that S&P will rate the $473 million RMBS deal, titled Springleaf Mortgage Loan Trust 2012-1. The pre-sale report includes preliminary ratings, though terms are not yet set.
Credit enhancement for the triple-A tranches are relatively high at 45%, while double-A tranches are enhanced to 35%. A reserve account totaling $1.4 million is in place to cover interest shortfalls for the rated notes.
S&P explained the credit enhancement: “For each class of preliminary rated notes, subordination of the notes that are lower in the priority of payments, an interest shortfall reserve fund, excess interest, and overcollateralization.”
The RMBS is backed by seasoned first-lien, fixed-rate and adjustable-rate residential mortgage loans secured by one- to four-family residences. The mortgages are held by subprime borrowers.
Wells Fargo (WFC) is the master servicer, with Nationstar Mortgage (NSM), another Fortress subsidiary, as subservicer. Most of the mortgages originated from American General (62%) and Wilmington Finance (23%). Wilmington Trust (WL) is owner trustee.
The preliminary ratings breakdown can be read by clicking below:
