MOODY'S RATES WASHINGTON MUTUAL MSC MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2003-AR4
Approximately $896 Million of Mortgage-Backed Securities Rated.
New York, October 01, 2003 -- Moody's Investors Service has assigned the rating of Aaa to the senior
certificates issued in the Washington Mutual MSC Mortgage Pass-Through
Certificates, Series 2003-AR4 securitization of Alt-A
mortgage loans. Moody's has also assigned ratings ranging from
Aa2 to Baa2 to the subordinate certificate classes of the deal.
According to Rachel Peng, a Moody's analyst, the rating assignments
are based primarily on the credit enhancement provided by subordination,
the structural and legal integrity of the transaction, and the capability
of Washington Mutual Mortgage Securities Corp. as the master servicer
of the loans.
The 2003-AR4 transaction incorporates a "super-senior" structure
where Aaa rated Class M certificates are junior to the remaining Aaa rated
certificates (Class A ). The incremental risk posed by an increase
in severity to Class M certificates (due to its small size) was a consideration
in sizing the credit enhancement for the Aaa rated certificates as a whole.
The loan pool backing the Series 2003-AR4 transaction consists
primarily of thirty-year, adjustable-rate mortgage
loans which are secured by first liens, and made to high credit
quality borrowers. The loans were originated by GreenPoint Mortgage.
The overall credit quality of the adjustable-rate mortgage loans
underlying the Series 2003-AR4 transaction is slightly above average
for the Alt-A sector. The pool has a weighted average FICO
score of approximately 713 and a weighted average LTV of 77%.
All of the loans with loan to value ratios in excess of 80% are
covered by primary mortgage insurance policies.
The collateral pool consists of loans that have fixed mortgage rates for
3 or 5 years after the origination date, and are subject to interest
rate adjustment based on six-month LIBOR thereafter. During
their initial fixed rate period, 83% of the loans will provide
for payments of interest only. These interest-only loans
pose a greater risk if a default occurs because they do not provide any
principal payments during their initial fixed rate period. The
loan pool has a high concentration of loans in CA (69%) and a relatively
high number of reduced documentation loans (83%). The mortgage
loans have been divided into seven groups, which will be cross-collateralized.
The incremental risk posed by reduced documentation, CA concentration
and the interest-only loans was a consideration in calculating
credit enhancement for the combined pool.
The complete rating actions are as follows:
Issuer: Washington Mutual MSC Mortgage Pass-Through Certificates,
Series 2003-AR4
Depositor/Master Servicer: Washington Mutual Mortgage Securities
Corp.
Class I-A, $114,560,800, Variable,
Rated Aaa
Class II-A-1, $29,038,500,
Variable, Rated Aaa
Class II-A-2, $356,021,800,
Variable, Rated Aaa
Class II-X, Notional, Rated Aaa
Class III-A, $60,312,800, Variable,
Rated Aaa
Class IV-A, $145,516,900, Variable,
Rated Aaa
Class V-A, $17,753,300, Variable,
Rated Aaa
Class VI-A, $49,402,200, Variable,
Rated Aaa
Class VII-A, $50,326,600, Variable,
Rated Aaa
Class M, $34,746,000, Variable, Rated
Aaa
Class R, $100, 4.614%,Rated Aaa
Class B-1, $20,116,100, Variable,
Rated Aa2
Class B-2, $9,143,800, Variable,
Rated A2
Class B-3, $9,143,600, Variable,
Rated Baa2
Additional research will be available on www.moodys.com.
New York
Pramila Gupta
Managing Director
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Rachel Peng
Associate Analyst
Structured Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653