Morningstar Credit Ratings and Kroll Bond Rating Agency (KBRA) awarded preliminary “AAA” ratings to the $282.3m Class A tranche of the securitization, which reportedly priced at 135bp over Libor, while the “BBB-” Class E notes priced at 315bp over.
KBRA assigned the portfolio a loan-to-value ratio of 78.9%, which it consistent with the LTVs for the three most recent Invitation Homes transactions but higher than all other SFR offerings, which averaged 70.8%.
“Higher leverage generally implies less borrower equity, greater likelihood of default, and higher overall loss severity should an event of a default occur,” KBRA said in its pre-sale report.
The floating rate loan will require interest-only payments and have a two-year term with three 12-month extension options. It was underwritten by J.P. Morgan, with Deutsche Bank and Goldman Sachs as co-lead bookrunners.
Invitation Homes was formed in 2012 as a subsidiary of Blackstone Real Estate Partners to acquire, refurbish, and manage rental properties. The entity and its affiliates have amassed a portfolio of more than 46,812 homes.