KBRA Assigns Preliminary Ratings to FMC GMSR ISSUER TRUST, MSR COLLATERALIZED NOTES, Series 2021-GT1

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings of ‘BBB- (sf)’ to the Series 2021-GT1, Class A Term Notes and ‘BBB- (sf)’ to the Series 2021-GT1, Class B Term Notes from FMC GMSR ISSUER TRUST, Freedom Mortgage Corporation’s (FMC) master trust issuer of notes backed by a participation certificate evidencing a participation interest in mortgage servicing rights (MSR) on loans underlying Ginnie Mae guaranteed mortgage backed securities.

KBRA’s rating on the Series 2021-GT1 Term Notes is primarily driven by the credit rating of Freedom Mortgage Corporation (“FMC”) (KBRA Rating: BB+/Stable) as repurchase obligor under a repo facility in support of the Issuer’s mortgage servicing rights (“MSRs”) granted by Ginnie Mae to FMC, with certain transaction features, such as (i) the alignment of interest between FMC, Ginnie Mae, and the VFN and term noteholders, (ii) the potential ability to transfer servicing in the event of a FMC default, (iii) the existence of the Ginnie Mae Acknowledgment Agreement, and (iv) the requirement that the borrowing base be trued up monthly, providing slight uplift on the rating of the notes.

In performing the rating review, KBRA utilized its Finance Company Rating Methodology, Corporate Instrument Notching Global Methodology, as well as its Global Structured Finance Counterparty Methodology and ESG Global Rating Methodology.

Click here to view the report. To access ratings and relevant documents, click here.

Related Publications

• Freedom Mortgage Corporation Surveillance Report
• Global Finance Company Rating Methodology
• Corporate Instrument Notching Global Methodology
• Global Structured Finance Counterparty Methodology
• ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. 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.

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