Alterna Tax Asset Group plans to offer $67.3 million of securities backed by property tax lien certificates from municipalities within the states of Arizona, Florida, Illinois, Maryland, Montana, New Jersey, New York and South Carolina, according to Kroll Bond Ratings Agency.
The issuer's second-ever securitization, dubbed Alterna Funding II 2015-1, will offer $64 million of class A bonds, rated AAA’ and $3.2 million of A’ rated, class B notes. The notes are due February 2024. Alterna issued its inaugural securitization. Alterna Funding I, in July 2014.
Guggenheim Securities is the lead manager on the deal.
The initial portfolio consists entirely of collateral associated with property tax liens in eight separate states, secured by 8,523 individual properties.
Up to $20.18 million of new tax liens on new properties may be added to the pool during the first six months of the transaction. These purchases will be made from an account that will be funded at closing from note proceeds.
The transaction also includes a subsequent tax lien account totaling $8.5 million at closing to purchase subsequent tax liens on properties already subject to tax liens in the initial pool, as well as subsequent liens on properties purchased via the new tax lien account.
Since the inception of its tax lien platform in 2009, Alterna has acquired approximately $341 million of tax liens linked to over 46,000 properties in over 250 jurisdictions, located across 12 states and the District of Columbia.
The lien portfolio has experienced very little loss, according to Kroll. Over 50.0% of the tax liens were redeemed within 12 months and over 90.0% have been redeemed within three years of purchase; only 28 properties related to the jurisdictions contained within the issuer’s securitization have become real-estate-owned.