NEW YORK–(BUSINESS WIRE)–#KBRA–KBRA assigns preliminary ratings to 6 classes of mortgage-backed notes from Saluda Grade Alternative Mortgage Trust 2023-SEQ3 (GRADE 2023-SEQ3), a $232.7 million RMBS transaction sponsored by Saluda Grade Opportunities Fund LLC. The collateral consisted of closed-end second lien mortgages (CES; 55.8%), second lien home equity lines of credit (HELOCs; 43.1%), and first lien HELOCs (1.1%). The underlying pool is seasoned six months and comprises 2,587 loans originated by Spring EQ, LLC. The CES collateral is characterized by fully amortizing, fixed-rate mortgages, while the HELOC portion consists of adjustable-rate mortgages with 10-year interest-only terms. The HELOCs also feature a 20-year repayment period after a 10-year initial draw window, with borrowers having drawn $102.8 million from the combined credit limit of $139.7 million (an 73.6% current draw percentage, also referred to as the utilization rate).
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Related Publications
- GRADE 2023-SEQ3 Tear Sheet
- RMBS KBRA Comparative Analytic Tool (KCAT)
- U.S. RMBS Mortgage Default and Loss Model Methodology
- U.S. RMBS Rating Methodology
- Global Structured Finance Counterparty Methodology
Disclosures
Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.
A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be located here.
Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.
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