Angel Oak Mortgage REIT has issued a $284.5 million non-QM securitization, which the company said marks an “inflection point” in its business.
The company said it intends to use the capital to purchase more newly originated, high-coupon loans while continuing to manage liquidity. The securitization will also reduce Angel Oak’s whole loan warehouse debt by 45.6% from the first quarter of 2023, bringing the total reduction in the REIT’s whole loan warehouse debt since the end of Q3 2022 to approximately 73.7%.
“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,” Sreeni Prabhu, CEO and president of Angel Oak Mortgage REIT, said in a statement Wednesday.
The securitization includes a portfolio of 606 non-QM loans with a scheduled principal balance of $284.5 million. The loans have 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 of 734.
Prior to the securitization deal, 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, the company said.
The senior tranche received an AAA rating from Fitch Ratings.