Nomura, Beach Point Said to Plan Rare Offering of Non-Prime RMBS

Nomura Holdings Inc. plans to begin marketing a new securitization of home loans for borrowers with non-prime credit, according to a person with direct knowledge of the matter.

The unrated offering, planned for this month and sponsored by Beach Point Capital Management, would contain mortgages originated by Citadel Servicing Corp. with a combined face value of less than $100 million, the person said. It would be one of the few securitizations of riskier mortgages following a drought dating back to the 2008 financial crisis. 

Nomura spokeswoman Jennifer Will declined to comment. Messages left at Beach Point weren’t immediately returned. Newsletter Inside Mortgage Finance first reported plans for the residential mortgage-backed securities deal.

Investment firms are trying to revive the private market for newly originated and riskier home loans without repeating the mistakes that fueled the housing bubble of the mid-2000s. Issuance has been slow to emerge. Analysts at JPMorgan Chase & Co. had forecast as much as $5 billion of bonds backed by this sort of debt could be sold in 2015, but realized issuance is on track for far less.

A deal arranged by Credit Suisse Group AG for Loan Star Funds in August may be the only successful securitization to date that contains this sort of mortgage credit.

Nomura was marketing a similar bond offering on behalf of Angel Oak Capital in September, but the deal remains unsold. It has faced headwinds involving multiple loan-servicing parties, among other issues, according to two people briefed on the matter, requesting not to be named because the matter is private. 

Freddy Martino, a spokesman for Angel Oak at Gregory FCA, declined to comment.

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