Drop Moody’s and leverage up: new Cerberus RMBS boosts triple-A portion

By Owen Sanderson
31 Jan 2020

Cerberus has juiced up its latest UK buy-to-let RMBS deal by dropping Moody’s from the deal, which has a more dismal view of the market than its rival rating agencies. Among other structural changes, this has allowed the private equity firm to enlarge its triple-A tranche by more than 10 percentage points, giving a far more efficient capital structure.

The deal, Towd Point Mortgage Funding 2020-Auburn 14, refinances a deal from 2017, which in turn securitized a portfolio of pre-crisis buy-to-let mortgages originated by Capital Home Loans.

As the deal being refinanced, Auburn 11, had been rated by Moody’s, S&P, Fitch and DBRS, one might have expected ...

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