Angel Oak Mortgage REIT Inc. (AOMR) said Wednesday it issued a nearly $285 million securitization backed primarily by Non-QM loans, calling it an “inflection point” for the company.
The Atlanta-based real estate finance company, which focuses on Non-QM loans in the U.S. mortgage market, said it issued AOMT 2023-4, an approximately $284.5 million scheduled principal balance securitization backed by a pool of residential mortgage loans, all of which were contributed by the company.
The senior tranche received an AAA rating from Fitch Ratings, it said.
“We believe that this securitization represents an inflection point in our business, as the approximately $30 million of capital that will be released through AOMT 2023-4 allows us to materially expand the loan acquisition activity that we began earlier this quarter,” said Sreeni Prabhu, CEO and president of Angel Oak Mortgage REIT. “By leveraging our affiliated loan origination platform to accelerate loan purchase activity, we can compound the impact of the de-risking actions we’ve taken over the previous quarters while driving meaningful net interest income growth.”
AOMR said the securitization will also reduce its whole loan warehouse debt by approximately 45.6% from the first quarter of 2023, bringing the total reduction in the company’s whole loan warehouse debt since the end of the third quarter of 2022 to approximately 73.7%.
Key Highlights
- AOMT 2023-4 includes a portfolio of 606 Non-QM loans with a scheduled principal balance of $284.5 million with a weighted average loan coupon of 4.5%, a weighted average original loan-to-value ratio of 71.3%, and a weighted average original FICO score 734.
- With the capital released from the securitization, AOMR intends to accelerate purchases of current market coupon loans.
- Prior to the announced transaction, AOMR had begun actively purchasing newly originated loans carrying a weighted average loan coupon of 8.2%, a weighted average original loan-to-value ratio of 72%, and a weighted average original FICO score of 749.
