Change Lending LLC, a subsidiary of The Change Company CDFI LLC, has closed its seventh securitization of its proprietary Community Mortgages, the first such securitization to earn an AAA rating for the senior A1 class.
Sixteen unique investors participated in the $307 million offering, demonstrating the growing interest and strengthening demand from well-established RMBS investors, including socially responsible money managers, banks, insurance companies and private funds.
“Receiving our first AAA rating on a securitization comprised solely of our proprietary Community Mortgage is an important milestone,” says Jesse Elhai, managing director of capital markets for Change. “We appreciate DBRS Morningstar and our investors for recognizing and rewarding the strong credit underwriting and performance of our Community Mortgage securitizations.”
The securitization, which was issued from Change’s shelf registration (CHNGE), closed on May 25. The securitization comprised loans with a weighted average FICO of 740, LTV of 71.1%, 43 months of reserves and 8.72% note rate.
This transaction follows the completion of a comprehensive assessment by Institutional Shareholder Services (ISS) that validated Change’s social bond and loan framework. The analysis by ISS determined that Change’s mission-driven mortgage products, social lending and inclusive business model align with the Social Bond Principles established by the International Capital Markets Association and positively contributed to the Sustainable Development Goals defined by the United Nations. Cantor Fitzgerald served as the initial purchaser and bookrunner on the transaction.
Dentons US LLP served as issuer counsel to Change, and Hunton Andrews Kurth LLP served as underwriter counsel in the transaction.
