1. KBRA assigns preliminary ratings to RITM's $504.3 million RMBS transaction. 2. 1,039 residential mortgages in NRMLT 2025-NQM3 show strong borrower credit scores. 3. Mortgage pool includes 99.7% fixed-rate and 0.3% adjustable-rate loans. 4. LTVs at 70.1% suggest manageable risk in the loan pool. 5. Positive factors include detailed loan-level analysis and cash flow modeling.
The strong ratings and analysis from KBRA indicate solid underlying asset quality, often correlating with stock price increases in similar RMBS transactions. Historically, improvements in credit ratings can positively influence REIT stock performance.
The article discusses a large RMBS transaction sponsored by RITM, directly impacting investors' perceptions and understanding of the company’s financial health. The detailed breakdown of the mortgage pool speaks to RITM's strategic strengths and operational stability.
The immediate recognition of the ratings from KBRA can lead to short-term price movements in RITM, as markets often react quickly to credit ratings and assessments. For example, similar rating upgrades historically led to quick U.S. REIT stock gains.
NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to 8 classes of mortgage-backed notes from New Residential Mortgage Loan Trust 2025-NQM3 (NRMLT 2025-NQM3), a $504.3 million non-prime RMBS transaction sponsored by Rithm Capital Corp. (formerly New Residential Investment Corp.), a publicly traded (NYSE: RITM) real estate investment trust (REIT). The underlying mortgages in the subject pool were originated by Champions Funding, LLC (31.0%) and NewRez LLC (24.2%). In addition, all loans will be serviced by Shellpoint Mortgage Servicing, a brand of NewRez LLC.
NRMLT 2025-NQM3 is collateralized by a pool of 1,039 residential mortgages. Borrowers in NRMLT 2025-NQM3 possess a non-zero WA original credit score of 750 and exhibit a weighted average (WA) original loan-to-value (LTV) and a WA combined LTV (CLTV) of 70.1%. The loans are seasoned approximately two months and include both fixed-rate mortgages (FRMs; 99.7%) and adjustable-rate mortgages (ARMs; 0.3%). Approximately 6.8% of the pool has an initial interest-only period.
KBRA’s rating approach incorporated loan-level analysis of the mortgage pool through its Residential Asset Loss Model (REALM), an examination of the results from third-party loan file due diligence, cash flow modeling analysis of the transaction’s payment structure, reviews of key transaction parties and an assessment of the transaction’s legal structure and documentation. This analysis is further described in our U.S. RMBS Rating Methodology.
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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.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.
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