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Investments

Citigroup markets private-label jumbo mortgage bonds

DBRS assigns high ratings to largest tranches

Fed Money
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Ratings agency DBRS assigned provisional ratings to the private Mortgage Pass-Through Certificates, Series 2013-J1 issued by Citigroup Mortgage (C).

The two largest tranches, both nearly $200 million are expected to be rated triple-A. It is the first "super-prime" transaction issued by Citigroup since the financial crisis, according to DBRS research coordinator Stephen Bernard.

According to DBRS, the certificates are backed by 274 prime residential mortgage loans with a total principal balance of $209 billion.

The originators for the mortgage pool are Nationstar Mortgage (NSM) (43.7%), Stearns Lending (28.5%), Freedom Mortgage Corporation (12.3%), Fifth Third Mortgage Company (FITB) (7.5%), Real Estate Mortgage Network (5.4%), and RMR Financial (2.7%).

Nationstar and Fifth Third will service the mortgages.

"The ratings reflect transactional strengths that include high quality underlying assets, well qualified borrowers and satisfactory third-party due diligence review," said DBRS in a statement. "Compared to other recently-issued prime jumbo transactions, this portfolio contains a very strong FICO score, combined LTV and DTI ratios with much less barbelled distributions."

In addition, the pool only contains 6.9% 15-year mortgages, no investor loans, no interest only loans and no piggybacks, the presale report states.

 

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