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Cerberus has added Citi to its standard syndicate of Bank of America and Morgan Stanley for its latest Towd Point RMBS, which refinances part of the buy-to-let mortgage portfolio it acquired when it bought Capital Home Loans. The new deal is a far more efficient capital structure than the deal it replaces, thanks in part to changes in the rating agency line-up.
The new deal, Towd Point Mortgage Funding 2020-Auburn 14, refinances Towd Point Mortgage Funding 2017-Auburn 11, which has paid down from £1bn at closing to £855m, and which is due to be called in February.
It is also sharply more efficient financing than the deal it replaces. The triple-A part of the capital structure is now 85%, rather than 73.25% in Auburn 11. The overall advance rate on the rated notes is now up to 94.5%, just a whisker shy of the 95% maximum achievable using a horizontal risk retention structure.
Not all rating agencies on the deal appear to agree with the tweaks to the capital structure to achieve this improvement, though. From class ‘D’ down the structure, S&P...