Jeronimo Funding DAC Receives Initial Ratings from KBRA

KBRA Assigns Preliminary Ratings to Jeronimo Funding DAC

KBRA Europe (KBRA) has recently assigned preliminary ratings to six classes of notes issued by Jeronimo Funding DAC. This static RMBS securitization is primarily backed by restructured and reperforming mortgage loans, secured by properties in Spain.

The portfolio underlying these assets is composed of a substantial €305.9 million mix of seasoned first lien performing and reperforming mortgages. The secured properties include a variety of owner-occupied homes, second or holiday residences, and some non-residential properties. Specifically, a notable 91.4% of the secured loans are owner-occupied, while 4.2% are categorized as holiday or second homes, and 4.4% are non-residential.

Major players in the origination of these loans include Unicaja Banco, S.A. (responsible for 68.0% of the originated loans), along with Liberbank SA, which is now part of Unicaja (18.8%), and Banco CEISS (9.7%) along with other Spanish banks that are under the Unicaja umbrella, contributing a total of 3.5%.

Unicaja has been designated as the lender of record and will also act as the primary servicing agent. In addition, Pepper Spanish Servicing, S.L.U. will take on the responsibilities of the special servicer.

The payment structure of the notes is designed to follow a strictly sequential priority, enhancing the clarity and efficiency in how funds are managed. Moreover, the notes possess an advantage with a fully funded reserve account that supports liquidity for potential payment obligations.

Detailed Overview of the Notes and Ratings

With the increasing focus on structured finance, the ratings assigned by KBRA to Jeronimo Funding DAC emphasize the importance of thorough credit analysis. The preliminary ratings provide valuable insights on the risk levels associated with the asset-backed securities market. Such ratings are crucial as they assist investors in understanding the relative creditworthiness of the various tranches involved.

The introduction of this series of notes marks a significant step for Jeronimo Funding DAC as they seek to provide attractive investment opportunities in a competitive market. The backing of established financial entities adds to the stability and attractiveness of these notes.

Understanding the Collateral

The quality of the underlying collateral is a pivotal factor in determining the ratings given by KBRA. The robust nature of the portfolio, drawing from seasoned debt, ensures that the risks associated with defaults are mitigated. Seasoned loans typically show a history of performance, thus providing additional comfort to potential investors.

The Role of Servicing Agents

The engagement of competent servicers like Unicaja and Pepper highlights a strategic approach to manage the mortgage loans efficiently. Their expertise in servicing and restructuring loans is essential for maintaining performance and ensuring timely payments throughout the life of the notes.

Methodologies and Disclosures

In defining the ratings for Jeronimo Funding DAC, KBRA employs comprehensive methodologies which include factors such as the stability of the cash flows, the performance history of the underlying loans, and market trends affecting real estate in the region.

For those interested in further details, KBRA outlines various methodologies, including the European RMBS Rating Methodology and a specific addendum for Spain. This provides transparency into how ratings are constructed and the underlying metrics that influence them.

Disclosures regarding key credit considerations include analyses that address potential areas for rating upgrades or downgrades based on market and performance fluctuations. This level of clarity fosters confidence among stakeholders.

About KBRA Europe

Kroll Bond Rating Agency (KBRA) stands out as a full-service credit rating agency and is officially registered with regulatory bodies across the globe. Its European branch, KBRA Europe Limited, operates under stringent guidelines set forth by the European Securities and Markets Authority, ensuring credibility in the services it provides.

Located in Dublin, KBRA aims to maintain a high standard of evaluation and offers valuable insights into the creditworthiness of numerous financial products, including mortgage-backed securities. It has established a reputation for reliability and thoroughness in its credit ratings, making it a respected entity within the financial services industry.

Frequently Asked Questions

What does KBRA stand for?

KBRA stands for Kroll Bond Rating Agency, which is a credit rating agency focused on delivering thorough and reliable ratings.

What type of collateral backs the notes issued by Jeronimo Funding DAC?

The notes are backed by a portfolio of seasoned restructured and reperforming mortgage loans, primarily secured by residential properties in Spain.

Who are the servicers of the loans?

Unicaja will act as the primary servicer of the loans, while Pepper Spanish Servicing, S.L.U. will serve as the special servicer.

Why are the ratings from KBRA important?

The ratings provide insights into the creditworthiness of the notes, helping investors assess the associated risks and make informed decisions.

Where is KBRA Europe located?

KBRA Europe is located at 6-8 College Green, Dublin 2, Ireland, providing rigorous analysis of credit ratings in the region.

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