Angel Oak Mortgage REIT, Inc. (NYSE: AOMR) stock has moved significantly since the company’s impending financial results were revealed. After a calm trading day that closed at $9.79, down -0.51%, AOMR shares increased 4.19% to $10.20 in last Friday’s after-market session.
The company will release its financial results for the third quarter of 2024 on Wednesday, November 6, 2024, before to the market opening. A conference call to discuss the performance will be place later that day.
Successful Residential Mortgage Loan Securitization
Angel Oak (AOMR) recently announced its financial accomplishments and completed a large securitization, AOMT 2024-10, valued at around $317 million. A pool of residential mortgage loans serves as the collateral for this securitization, and Fitch Ratings has given the senior tranche a AAA rating. The successful completion of AOMT 2024-10 demonstrates the robustness of Angel Oak’s business strategy by highlighting its efficient platforms for origination, acquisition, and securitization.
Strategic Capital Deployment and Future Growth
Angel Oak’s second quarter discussions indicated that the loans involved in the AOMT 2024-10 securitization were primarily funded through proceeds from the company’s July senior unsecured notes issuance. By effectively deploying this capital, Angel Oak has managed to cover the cost of capital from its July offering and set the foundation for growth in the fourth quarter and beyond.
AOMR plans to reinvest the capital from this securitization into newly originated, high-quality non-QM (non-qualified mortgage) loans, further enhancing its balance sheet growth and net interest margin.
Impact of Securitization on Debt and Funding Costs
AOMT 2024-10 includes a portfolio of 661 non-QM loans, amounting to $316.8 million in principal balance, with a weighted average loan coupon of 7.79%. The deal lowers the funding cost for these loans by more than 110 basis points, further supported by the Federal Reserve’s recent rate cuts. Additionally, this transaction reduces Angel Oak’s whole loan warehouse debt by $260 million, significantly improving the company’s debt-to-equity ratio.