KBRA upgrades junior notes on Jamestown Residential 2024-1 DAC
Irish residential mortgage-backed securities deal Jamestown Residential 2024-1 DAC receives a mixed set of rating actions after a surveillance review of its capital structure. The review affirms the senior and mezzanine Class A to Class C notes and upgrades the Class D to Class G notes, reflecting sufficient credit enhancement in the transaction.
Highlights
- KBRA Europe upgrades Class D, E, F, and G notes and affirms Class A, B, and C notes on Jamestown Residential 2024-1 DAC after a surveillance review.
- Portfolio balance decreased to 579.5 million euros from 702.1 million euros at closing, excluding 5.2 million euros of unsecured loans, with 93.0% secured by owner-occupied properties.
- The largest origination share comes from Bank of Scotland (Ireland) Limited at 44.5%, and servicing is mainly by Pepper Finance Corporation (Ireland) DAC at 65.6%.
Surveillance review and transaction profile
As reported by KBRA Europe, citing Kroll Bond Rating Agency, KBRA Europe says its surveillance review of Jamestown Residential 2024-1 DAC leads to affirmations on the Class A, Class B and Class C notes, alongside upgrades for the Class D, Class E, Class F and Class G notes.KBRA says its analysis shows the existing credit enhancement is sufficient to support those rating actions. The securitisation is a static RMBS transaction backed by seasoned, restructured and reperforming Irish mortgages.
The portfolio has a current balance of 579.5 million euros, down from a closing balance of 702.1 million euros, excluding 5.2 million euros of unsecured loans. It is secured mainly by owner-occupied properties, which account for 93.0% of the pool, while buy-to-let properties make up the remaining 7.0%.
Irish mortgage exposure and servicing structure
The underlying loans were originated by several lenders, led by Bank of Scotland (Ireland) Limited with 44.5% of the pool. Bank of Ireland group entities and subsidiaries account for 34.4%, followed by Start Mortgages DAC at 18.7% and Nua Homeloans Limited at 2.4%.Servicing of the transaction is currently split between Pepper Finance Corporation (Ireland) DAC, which handles 65.6% of the portfolio, and The Governor and Company of the Bank of Ireland, which services 34.4%. The portfolio has a weighted average seasoning of 19.6 years, and the transaction closes in July 2024, with the first optional redemption date in July 2027 and final legal maturity in January 2063.
In our earlier article on the rise in U.S. 30-year fixed mortgage rates, we noted that borrowing costs climbed to 6.69% as bond yields moved higher and investors stayed focused on inflation risks. We also explained that shifting expectations for Federal Reserve policy, alongside renewed geopolitical tensions that pushed up energy prices, were adding pressure to housing finance conditions.
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