MFA Financial prices $246.3 million portion of RMBS via Deutsche Bank
Real estate investment trust MFA Financial (MFA) announced Tuesday an aggregate sale of $985.2 million of private residential mortgage-backed securities to Deutsche Bank Securities. The sale is part of a resecuritization transaction from last week and represents the principal value of the RMBS. Third-party investors additionally purchased $246.3 million of variable rate senior bonds. Those bonds are rated triple-A by Standard & Poor's, and issued through Deutsche Mortgage Securities via its resecuritization vehicle Remic Trust, Series 2010-RS2 . The senior bonds have a weighted average life of 1.3 years and a pass-through rate of one-month LIBOR +125 basis points. "Since MFA will consolidate the Trust, MFA views this structured transaction as effectively financing the underlying RMBS at an attractive rate," said the company in a release. As part of the deal, MFA acquired $375.2 million of six classes of mezzanine triple-A fixed-rate bonds and $363.7 million of non-rated subordinate bonds, as credit support. "MFA expects to finance these bonds using repurchase agreements and has the flexibility to sell some or all of these bonds in the future," the company adds. Write to Jacob Gaffney. The author holds no relevant investments.