First of its kind? Angel Oak claims securitization like this has never been done before.
In a deal the company claims is a first of its kind, Angel Oak Capital Advisors recently completed a $90 million securitization backed by fix-and-flip loans.
The underlying loans were originated by Angel Oak Prime Bridge, Angel Oak Capital’s affiliated direct investment property lender.
The securitization’s structure is unique in that the terms of the underlying loans expire before the securitization does. As such, new loans will replace the paid-off loans in the securitization.
The underlying loans, which were issued by Prime Bridge to residential real estate investors, carry original loan terms of between six and 12 months.
The securitization, on the other hand, carries an 18-month revolving period in which the paid collateral is replaced with new collateral.
The average loan balance of the underlying loans is $199,052.
Angel Oak co-CEO and Chief Investment Officer Sreeni Prabhu said that the appetite is exists among investors for these types of unique offerings.
“Investors are attracted by this product and its unique structure. The short-term nature of the collateral paired with an attractive yield makes for a rare opportunity in today’s investing climate,” Prabhu said.
“But most importantly, investors understand the Angel Oak story by now. Our affiliated mortgage companies’ expertise in quality origination gives investors confidence that our securitizations are backed by loans underwritten to specific guidelines,” Prabhu added. “We believe we have one of the most diverse securitization platforms in the industry.”
This latest securitization is Angel Oak’s sixth since 2015, bringing the total to more than $900 million.
Prime Bridge Senior Vice President Robert Mulcahy said that the deal will allow the lender to grow its lending platform.
“The securitization will allow Prime Bridge to expand its reach and provide capital to more real estate investors,” Mulcahy said. “This, in turn, will lead to the improvement of housing stock in many areas and the betterment of many communities.”