KBRA Assigns Preliminary Ratings to Angel Oak Mortgage Trust 2025-HB1 (AOMT 2025-HB1)

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to six classes of mortgage-backed notes from Angel Oak Mortgage Trust 2025-HB1 (AOMT 2025-HB1), a $191.3 million RMBS transaction sponsored by Angel Oak Real Estate Investment Trust III (Angel Oak), consisting of first lien (9.1%) and second lien (86.2%) home equity line of credit (HELOC; 95.2% total HELOC population) loans, as well as 4.8% closed-end second (CES) loans. The underlying pool is seasoned approximately six months and comprises 1,856 loans, with Homebridge Financial Services, Inc. (Homebridge; 87.9%) and Angel Oak Mortgage Solutions LLC (Angel Oak; 11.2%) as the largest contributing originators in the transaction. The HELOC loans are structured as interest-only (IO) adjustable-rate mortgages (ARMs), nearly all of which have initial draw periods of five years. Following the IO period, most loans transition to amortization terms of either 10-years (86.8%) or 15-years (6.9%). The CES loans consist exclusively of fixed-rate mortgages (FRMs), predominantly featuring 30-year amortization terms. As of the April 1, 2025 cut-off date, the HELOC borrowers have drawn $182.2 million from a total credit limit of $227.9, reflecting a utilization rate of 79.9% for the HELOC population. If HELOC borrowers were to fully draw their available credit lines, HELOC loans would represent 96.1% of the aggregate pool.

The AOMT 2025-HB1 deal structure incorporates excess spread along with a sequential interest waterfall and pro-rata/sequential-pay hybrid principal payment waterfall. Losses will be allocated reverse sequentially beginning with the Class B-3 Notes through to the Class A-1 Notes.

To access ratings and relevant documents, click here.

Click here to view the report.

Related Publications

• RMBS KCAT
• AOMT 2025-HB1 Tear Sheet

Methodologies

• RMBS: U.S. RMBS Rating Methodology
• Structured Finance: Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1009159