NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to 23 classes from Structured Agency Credit Risk (STACR®) REMIC 2019-HQA4 Notes, Freddie Mac STACR REMIC Trust 2019-HQA4 (STACR 2019-HQA4), a credit risk sharing transaction with a total note offering of $432,000,000. STACR 2019-HQA4 features credit exposure to Reference Obligations with original loan-to-value (LTV) ratios greater than 80% but less than or equal to 97%. The Offered Notes represent obligations of the STACR 2019-HQA4 Trust in a credit-linked note structure governed by a Credit Protection Agreement (CPA) between Freddie Mac, the Issuer and Trust, and the Indenture Trustee, with payments subject to the credit and principal payment risks of the STACR 2019-HQA4 Reference Pool.
The STACR 2019-HQA4 Reference Pool consists of 57,557 residential mortgage loans with an outstanding principal balance of approximately $13.4 billion as of the Cut-Off Date. The Reference Obligations are fully-documented, fully-amortizing, primarily 30-year fixed-rate mortgages (FRMs) of prime quality. The borrowers in the STACR 2019-HQA4 Reference Pool have a non-zero WA (NZWA) original credit score of 745 and a NZWA debt-to-income (DTI) ratio of 37.7%.
KBRA’s rating approach incorporated loan-level analysis of the reference pool through its Residential Mortgage Default and Loss Model, an examination of the results from loan file reviews performed by an independent third-party firm, cash flow modeling analysis of the transaction’s payment structure, reviews of key transaction parties and an assessment of the transaction’s legal structure and documentation. This analysis is further described in our U.S. RMBS Rating Methodology.
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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.