1. KBRA rates $493.7 million RMBS by Rithm Capital. 2. Transaction backed by 915 residential mortgages at LTV of 72.2%. 3. Loans are primarily fixed-rate with good credit scores. 4. Rating reflects detailed loan-level analysis using REALM methodology.
FAQ
Why Bullish?
KBRA's preliminary ratings can enhance investor confidence, driving up RITM's value, similar to past RMBS transactions. For instance, when similar ratings were assigned earlier, RITM's stock experienced positive momentum.
How important is it?
The assigned ratings and the increased transactional volume indicate stable operations, significantly impacting investor perception and RITM's stock performance. Historical trends suggest a strong correlation between such announcements and market optimism.
Why Short Term?
The immediate market reaction could lead to a short-term price increase, as seen with prior RMBS ratings that quickly resulted in stock price movements.
KBRA assigns preliminary ratings to 10 classes of mortgage-backed notes from New Residential Mortgage Loan Trust 2025-NQM7 (NRMLT 2025-NQM7), a $493.7 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 primarily originated by NewRez LLC (48.7%) and Champions Funding, LLC (16.1%). In addition, all loans will be serviced by NewRez LLC.
NRMLT 2025-NQM7 is collateralized by a pool of 915 residential mortgages. Borrowers in NRMLT 2025-NQM7 possess a non-zero WA original credit score of 757 and exhibit a weighted average (WA) original loan-to-value (LTV) of 72.2% and a WA combined LTV (CLTV) of 72.3%. The loans are seasoned approximately four months and consist of 99.3% fixed-rate mortgages (FRMs). Approximately 10.6% 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.
To access ratings and relevant documents, click here.
Click here to view the report.
Related Publications
Methodologies
- RMBS: U.S. RMBS Rating Methodology
- Structured Finance: Global Structured Finance Counterparty Methodology
- ESG Global Rating 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.
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.
Doc ID: 1012662
View source version on businesswire.com: https://www.businesswire.com/news/home/20251209693222/en/
Analytical Contacts
Minxi Qiu, Director (Lead Analyst)
+1 646-731-1263
minxi.qiu@kbra.com
Bianca Rexach, Associate Director
+1 646-731-1410
bianca.rexach@kbra.com
Patrick Gervais, Senior Managing Director (Rating Committee Chair)
+1 646-731-2426
patrick.gervais@kbra.com
Business Development Contact
Daniel Stallone, Managing Director
+1 646-731-1308
daniel.stallone@kbra.com