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Springleaf gears up for first RMBS deal of the year

Loan provider Springleaf Financial is adding fuel to the private-label residential mortgage-backed securitization market by embarking on its first deal of the year.

The platform, Springleaf Mortgage Loan Trust 2013-1, expects the deal’s total unpaid principal balance to reach $835.1 million.

Standard & Poor’s pre-rated the transaction, giving its tranches an expected AAA rating for the senior class and AA for the mezzanine. Additionally, the deal is expected to close April 10.


The platform is expected to have 12,220 loans packed into the transaction, with collateral consisting of seasoned first-lien, fixed and adjustable-rate residential mortgages secured by subprime borrowers.

American General mortgages will make up the majority of the deal, or roughly 54.4%.

Other originators include Wilmington Finance, Equity One (EQY), MorEquity, The Mortgage Store, and others. 

In addition, Springleaf will be the primary servicer and sponsor of the deal. Wells Fargo (WFC) will be the master servicer, MorEquity will be the servicer and Nationstar Mortgage Holdings (NSM) will be the subservicer.

Underwriters for the transaction are expected to be Merrill Lynch, Pierce, Fenner & Smith Inc., Credit Suisse Securities (CS), RBS Securities (RBS) and Citigroup Global Markets (C).

Furthermore, the properties as well as outstanding loan amounts are relatively low. Additionally, the pool’s weighted average current loan-to-value ratios remain in the high 80% or low 90%.

The credit rating agency identified various weakness within Springleaf Mortgage Loan Trust 2013-1, including specific loan characteristics.

For instance, high concentrations of cash-out mortgages, low weighted average FICO scores, and moderately elevated LTV ratios are accounted for in the increased loss coverage expectations.

As the sole provider of the representations and warranties for the transaction, Springleaf is currently rated ‘CCC,’ indicating the company may have financial difficulty in meeting repurchase claims.

An interesting collateral characteristic is the perceived strength from geographical diversity, a trait other RMBS issuers have previously lacked. 


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