Deal is composed primarily of non-QM loans
Angel Oak Capital Advisors has closed a $231 million securitization stocked with non-qualified mortgages (non-QM) originated by affiliated mortgage lenders. The deal is the first non-agency, mortgage-backed securitization issued in the US that qualifies as a social bond.
The non-agency MBS, called AOMT 2021-2, comprises 466 non-QM loans and has an average credit score of 740 and a loan-to-value ratio of 73%. The securitization pooled loans generally offer mortgage options for underserved US homebuyers, such as self-employed individuals, who are not able to borrow through traditional lending channels.
“The issuance of this securitization comes as a natural next step as part of our company-wide, socially conscious integration program,” said Rob McDonough, director of ESG and regulatory initiatives at Angel Oak. “This focus has allowed us to not only pioneer a social bond but also institute the due diligence necessary to ensure an impactful product. We have dedicated significant time, energy and resources to achieve this, and we are proud of our ability to execute on this first-to-market securitization.”
Read more: Angel Oak Capital Advisors steps into commercial real estate lending
In addition to adhering to the International Capital Market Association (ICMA) Social Bond Principles, Angel Oak said it developed a framework and used data analytics to categorize and quantify the bond’s social impact at the loan level.
The completion of the transaction marks the firm’s second securitization this year, totaling roughly $500 million in issuance in 2021 alone. Since Angel Oak’s first securitization in 2015, the firm has completed 23 securitizations totaling more than $7.9 billion.
“At its core, this securitization remains in line with the high standards set forth by Angel Oak while also bringing additional value through the lens of an impactful social bond,” said Namit Sinha, chief investment officer of private strategies at Angel Oak. “We’re continuously advancing our technologies and growing our practices to deliver new, progressive products for our demanding investors. These capabilities leverage Angel Oak’s adaptability and ultimately aid our continuing ability to deliver higher-yielding opportunities in a challenging market environment.”
