Freddie Mac's STACR 2025-DNA1 Receives KBRA Preliminary Ratings

Freddie Mac's STACR 2025-DNA1 Sees New Ratings from KBRA

KBRA has recently assigned preliminary ratings to a notable transaction involving Freddie Mac's Structured Agency Credit Risk (STACR) program. This particular set of ratings pertains to the STACR REMIC Trust 2025-DNA1 Notes, amounting to an impressive $675,500,000 in total note offerings. The STACR 2025-DNA1 continues to shed light on Freddie Mac's efforts in credit risk sharing while ensuring stability within the mortgage market.

Details of the Credit Risk Sharing Transaction

The STACR 2025-DNA1 features mortgages that possess loan-to-value (LTV) ratios that exceed 60% but remain at or below 80%. These notes are backed by a robust Reference Pool, which consists of 57,034 residential mortgage loans. As of the cut-off date, the total outstanding principal balance of the Reference Pool is approximately $18.7 billion, reflecting the significant scale of this transaction.

Quality and Composition of the Reference Pool

Focusing on quality, the Reference Obligations within the pool feature fully-documented, fully-amortizing 30-year fixed-rate mortgages (FRMs) which are of prime quality. Borrowers in this pool are not only vetted thoroughly, but they also showcase a weighted average (WA) original credit score of 757. In terms of financial health, the New Zealand weighted average (NZWA) debt-to-income (DTI) ratio stands at a manageable 38.4%. These metrics indicate that the pool is composed of responsible borrowers, which further enhances the reliability of the investment.

Analytical Approach by KBRA

KBRA's approach to rating this substantial transaction involved an in-depth loan-level analysis using its proprietary KBRA RMBS Credit Model and Residential Asset Loss Model (REALM). They utilized cash flow modeling techniques to assess the transaction's payment structure, while also incorporating findings from comprehensive third-party loan file due diligence. All these components work together to form a holistic view of the credit quality and potential risk associated with the STACR 2025-DNA1.

Legal Framework and Documentation Review

Moreover, KBRA conducted thorough reviews of essential parties involved in the transaction as well as a critical assessment of its legal structure and documentation. This all-encompassing analytical rigor ensures that all potential risks are considered, leading to more accurate and effective ratings.

Accessing Ratings and Additional Information

To gain insights into the ratings and various relevant documents, interested parties can easily access the data through official channels. KBRA has made it straightforward for researchers and stakeholders to obtain all necessary details as this transaction unfolds.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) operates as a comprehensive credit rating agency, recognized and officially registered with the U.S. Securities and Exchange Commission as an NRSRO. The agency also has international credibility, with subsidiaries established in Europe and the UK that meet regulatory requirements. KBRA's rigorous credit rating processes have made them a trusted name in the financial industry.

Frequently Asked Questions

What is the STACR 2025-DNA1?

The STACR 2025-DNA1 is a credit risk-sharing transaction from Freddie Mac involving structured agency credit risk.

What does KBRA's preliminary rating indicate?

KBRA's preliminary rating reflects the perceived credit quality and risk associated with the STACR 2025-DNA1 transaction, aiding investors in making informed decisions.

What kind of mortgages back the STACR 2025-DNA1?

The STACR 2025-DNA1 is backed by fully documented, fully amortizing, primarily 30-year fixed-rate mortgages.

What is the significance of LTV ratios in this context?

LTV ratios are crucial as they provide insights into the risk level of the mortgages; in this case, they range from over 60% to no more than 80%.

How can I find more information about KBRA's ratings?

More information regarding KBRA's ratings can be accessed through their official website and related publications on their transactions.

About Investors Hangout

Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/

Disclaimer: The content of this article is solely for general informational purposes only; it does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice; the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. The author's interpretation of publicly available data presented here; as a result, they should not be taken as advice to purchase, sell, or hold any securities mentioned or any other investments. If any of the material offered here is inaccurate, please contact us for corrections.