Angel Oak Capital Advisors Closes First-Ever Agency-Free Social Bond MBS
Angel Oak Capital Advisors closed a $ 231 million securitization stocked with unqualified (non-QM) mortgages from affiliated mortgage lenders. The transaction is the first agency-less mortgage-backed securitization issued in the United States to qualify as a social bond.
The non-agency MBS, called AOMT 2021-2, includes 466 non-QM loans and has an average credit score of 740 and a loan-to-value ratio of 73%. Bundled securitization loans typically provide mortgage options to underserved home buyers in the United States, such as the self-employed, who are unable to borrow through traditional lending channels.
“The issuance of this securitization is a natural next step in our company-wide socially responsible integration program,” said Rob McDonough, director of ESG and regulatory initiatives at Angel Oak. “This focus allowed us not only to create a social bond, but also to institute the due diligence necessary to guarantee a powerful product. We have devoted a great deal of time, energy and resources to achieving this, and we are proud of our ability to execute this first securitization in the market. “
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In addition to adhering to the International Capital Market Association’s (ICMA) principles of social bonds, Angel Oak said he developed a framework and used data analytics to categorize and quantify the social impact of the bond at the level of the loan.
The completion of the transaction marks the company’s second securitization this year, totaling around $ 500 million of issuance in 2021 alone. Since Angel Oak’s first securitization in 2015, the company has completed 23 securitizations totaling over $ 7.9 billion.
“Fundamentally, this securitization remains up to the high standards set by Angel Oak while delivering additional value through the lens of impactful social obligation,” said Namit Sinha, director of private strategy investments at Angel Oak. “We are continually improving our technologies and developing our practices to offer new, progressive products to our discerning investors. These capabilities leverage Angel Oak’s adaptability and ultimately contribute to our continued ability to deliver higher yielding opportunities in a challenging market environment.