Colony American Homes prices its third SFR deal

Colony American Homes has priced its third single-family rental securitization, Colony American Homes 2015-1. The company expects gross proceeds of approximately $640m from the offering, with a duration-weighted blended interest rate of LIBOR plus 188.8 basis points. The transaction is expected to close on or around June 11, 2015.

Colony American Homes has priced its third single-family rental securitization, Colony American Homes 2015-1.

The company expects gross proceeds of approximately $640m from the offering, with a duration-weighted blended interest rate of LIBOR plus 188.8 basis points. The transaction is expected to close on or around June 11, 2015.

Screenshot 2015-05-27 at 3.40.19 PMJPMorgan Chase Bank is originating the fixed rate loan behind CAH 2015-1, a $673.8m two-year, interest-only (IO), non-recourse loan secured by 3,879 single-family rental homes (with three one-year extension options).

KBRA and Morningstar issued preliminary ratings to the top five classes of CAH 2015-1, awarding a ‘AAA’ rating to the $317m top tranche. Eight classes of certificates will be issued: six entitled to monthly interest and principal distributions, one principal-only, and the final residual class.

As previously reported in Real Estate Capital, leverage on single-family securitizations continues to creep up as the industry becomes more comfortable with the asset class and issuers consider structuring deals with an added risk retention tranche.

CAH 2015-1 — the 20th single-borrower SFR deal — carries a 77.6% LTV, which is significantly higher than previous deals.

The 77.6% LTV on the securitization compares to just 70% on the two previous Colony deals, an increase due in part to the addition of a risk retention (5%) tranche that allows the securities to be sold in Europe.

 

 

 

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