American Homes 4 Rent has priced its second securitization transaction.
In a press release, the company said that it anticipates gross proceeds from the sale of its certificates of approximately $488 million, with an initial fixed weighted average coupon rate of 4.386% for a 10-year term. The transaction is intended to reduce the company's long-term cost of capital and is to close on or about September 19, 2014.
The deal, American Homes 4 Rent 2014-SFR2, securitizes a single $513.3 million loan, that is, in turn, secured by mortgages on 4,487 single family rental homes.
The transaction mirrors the size of the underlying loan, which was originated by Goldman Sachs Mortgage Company. An A tranche for nearly $314 million carries an expected rating of AAA(sf).’ A B piece for $23.6 million is rated AA+(sf)’, a C tranche for $32.6 million is rated AA-(sf),’ and a $33.8-million D piece is A(sf).’ An E tranche for $83.7 million is preliminarily rated BBB-(sf)’ while an unrated equity piece totals $25.7 million — 5% of the total deal volume.
The final maturity for all tranches is October 2036.
In May the company sold a total of $480 million of notes backed by rental payments. The company said it anticipated gross proceeds from that sale of approximately $481 million, with a duration-weighted blended interest rate of LIBOR plus 154 basis points.