Unlock Technologies, provides home equity agreement financing options to consumers, just closed its second deal of the year, privately placing $433.1 million in notes to investors with more investment-grade bonds than any of its prior deals from the UNLOK program, according to the company.

UNLOK 2026-2 weathered a volatile week for bonds, when Treasuries went just shy of breaking through 5.35%, somewhat spurred on as investors sought haven assets because of artificial-intelligence bubble fears. Mortgage rates in general were also seeing highs.

The current deal was structured with three classes of A, B and C notes, but the sponsor and collateral contributor retained the latter, rated BB (low) (sf) by Morningstar DBRS. Investors, many of whom were repeat customers, bought the class A at a coupon of 6.50%, at a spread of 255 basis points over the I-curve, according to Unlock Technologies' Chief Capital Officer Peter Silberstein.

Investors bought the class B notes at a coupon of 7.00%, according to the company Silberstein said.

All notes are slated to mature in October 2042.

UNLOK 2026-2 will repay noteholders sequentially, conferring subordination, and the deal has a cash reserve of about $10.7 million, representing about four months of interest payments, Silberstein said.

Classes A, B and C have initial credit enhancement levels of 30.34%, 18.64% and 4.94%, respectively.

As the deal came to market, professionals gathered at the ABS East in Miami, where the mood for the HEA contracts asset class was constructive, according to Silberstein.

A combination of a rich equity cushion nationally and mortgage rates above 7% provides incentive for home equity line of credit financing, Silberstein notes. Balances for HELOCs are up 12% in a year, but with an estimated $35 trillion of equity nationally, homeowners appear to have plenty of opportunity cushion to work with, Silberstein said.

DBRS assigned ratings of A (low) (sf) and BBB (low) (sf) to classes A and B, respectively.