Margin widens on non-conforming RMBS

Bluestone Group will pay a margin of 120 basis points on the A1 notes of its latest issue of non-conforming residential mortgage-backed securities, which is wider than margins paid on other recent non-conforming issues.

When Bluestone last issued RMBS, in November last year, the margin on the A1 notes was 140 bps.

However, Pepper Australia paid a margin of 95 bps on the A1 notes of an A$400 million non-conforming RMBS issue priced earlier this month.

In May, RedZed Lending Solutions paid a margin of 115 bps on the A1 notes $150 million non-conforming issue. And Liberty Financial paid the same margin on the A1 notes of a $300 million non-conforming issue in April.

Bluestone's Sapphire XIII Series 2014-1 issue raised $209.3 million of funding.

The $138.6 million of A1 notes, which have a weighted average life of 2.4 years, were priced at 120 bps over the swap rate.

Pricing on the $40.3 million of A2 notes, which have a weighted average life of 2.4 years, was 175 bps over the swap rate.

Pricing on the $7.5 million of B notes, which have a weighted average life of 3.9 years, was 250 bps over swap.

And pricing on the $7.3 million of C notes, which have a weighted average life of 3.9 years, was 360 bps over swap.