American Homes 4 Rent (AMH) has engaged advisors to assist in structuring and negotiating a securitization transaction secured by a portion of its portfolio of single-family properties.
The deal is slated to come to market within the next 90 days the mortgage REIT said in a press release on Friday. The transaction has been approved by its board of trustees.
"We are very excited to finalize the details to take advantage of this new capital opportunity. We look forward to leveraging our superior proprietary business model to reduce our cost of capital over the long term," said David P. Singelyn, Chief Executive Officer.
AMH exclusively focuses on single-family rental investments. The company’s portfolio totaled 19,000 properties for a total investment of $3.4 billion.
In July, it raised $887 million through its IPO. In March it announced that it set up a $500 credit facility with Wells Fargo that featured a $500 million accordion feature that would allow the REIT to borrow up to $1 billion.
Deutsche Bank priced Blackstone’s REO-to-Rental securitization -- the first of its kind -- on Tuesday, tighter than expected with high demand, according to a Trepp report.
The deal is “effectively a carbon copy of a CMBS deal,” said Deutsche Bank analysts in a report last week. “The mechanics of the servicing are the same; the holder of controlling class has the right to replace the special servicer subject to a quorum, should there be losses they are distributed reverse sequentially and principal and interest sequentially.”
Although the potential for this new asset class is anticipated to be large, “whether or not more of these deals will end up in the CMBS space and how investors will analyze them remains to be seen,” said Trepp analysts.