Ellington Financial Inc. Completes $251.8 Million Non-QM Loan Securitization

Rhea-AI Summary

Ellington Financial (NYSE: EFC) has successfully closed a $251.8 million securitization backed by non-qualified residential mortgage loans. The majority of these loans were acquired from LendSure Mortgage Corp., a strategic equity investment for the Company. The securitization received an AAA rating for its senior tranche from S&P and KBRA. Ellington Financial retained select tranches to meet credit risk retention rules and has the option to call the securitization post-redemption date.

Positive

• Closed a $251.8 million securitization, enhancing liquidity.
• AAA rating for the senior tranche boosts investor confidence.
• Strategic acquisition of non-QM loans from LendSure strengthens portfolio.

Negative

• None.

Ellington Financial Inc. (NYSE: EFC) (the "Company") announced today that it has closed a $251.8 million securitization backed by a pool of non-qualified residential mortgage (“non-QM”) loans. The Company originally acquired the vast majority of the non-QM loans from LendSure Mortgage Corp., a mortgage originator in which the Company holds a strategic equity investment.

The securitization was rated by both S&P and KBRA, with the senior tranche receiving AAA ratings. The Company retained certain tranches of the securitization in order to comply with credit risk retention rules, and also retained the option to call the securitization at any time following the optional redemption date.

About Ellington Financial Inc.

Ellington Financial invests in a diverse array of financial assets, including residential and commercial mortgage loans, residential and commercial mortgage-backed securities, consumer loans and asset-backed securities backed by consumer loans, collateralized loan obligations, non-mortgage and mortgage-related derivatives, equity investments in loan origination companies, and other strategic investments. Ellington Financial is externally managed and advised by Ellington Financial Management LLC, an affiliate of Ellington Management Group, L.L.C.

About LendSure Mortgage Corp.

LendSure is a privately held financial services company primarily engaged in the origination of residential mortgage loans. LendSure is led by a team of seasoned mortgage professionals who have many years of experience in the mortgage industry. LendSure is currently licensed (or not required to be licensed) to originate mortgage loans in 39 states, and operates primarily on a wholesale basis. LendSure was founded in March 2015 and maintains its corporate headquarters in San Diego, CA.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210303005942/en/

FAQ

What is the significance of Ellington Financial's $251.8 million securitization on EFC stock?

The $251.8 million securitization enhances liquidity and could positively impact EFC stock by increasing investor confidence.

Who rated the securitization closed by Ellington Financial?

The securitization was rated by S&P and KBRA.

What type of loans back the securitization by Ellington Financial?

The securitization is backed by a pool of non-qualified residential mortgage loans.

How does LendSure Mortgage Corp. relate to Ellington Financial?

Ellington Financial holds a strategic equity investment in LendSure Mortgage Corp. from which it acquired the majority of the non-QM loans.

What are the implications of retaining certain tranches in the securitization?

Retaining certain tranches allows Ellington Financial to comply with credit risk retention rules while also providing them the option to call the securitization.