American Homes 4 Rent is coming out with the market’s ninth securitization of single family rental homes, according to a pre-sale report by Kroll Bond Rating Agency (KBRA).
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.
The underlying loan has a ten-year term and amortizes monthly by the equivalent of an annualized one percent of the principal on the origination date.
The properties exhibit a healthy degree of geographic diversification, with the most represented state, Texas, accounting for 18.1% of the portfolio. Illinois is second, with 16.9%, and North Carolina third, with 13.5%.
Midland Loan Services is the master servicer on the deal.
Among the deal’s strengths is an LTV ratio of 68.4%, as measured by KBRA based on the portfolio’s aggregate broker price opinion value.
This marks American Homes’ second deal in this asset class.