B2R Finance is marketing a second securitization of loans for rental properties that is both larger and better supported than the issuer's inaugural deal.
The loans, underwritten by the sponsor, finance the purchase of single-family homes and small multifamily properties. In total, B2R Finance 2015-2 pools 211 loans that are secured by 4,272 properties. On average, loans are cross-collateralized by 20 properties. By comparison, B2R 2015-1, issued in March, pooled 144 loans, secured by 3,160 properties for a total of $229 million.
Fitch Ratings assigned preliminary 'AAA' ratings to the class A notes that benefit from 36.3% credit enhancement, versus 33.75% credit support on the 'AAA' notes issued from the sponsor's first deal. The trust will also offer tranches rated from 'AA-' to 'BBB-'.
Fitch's net cash flow debt yield for this transaction is 8.75%, down a touch from 8.78% for B2R 2015-1.
Both the B2R transactions have greater loan/property diversity and higher debt yields than the two other multi-borrower SFR transactions that have closed in 2015, issued by First Key and Colony American Finance. These other transactions consisted, respectively, of 16 and 69 loans; averaged 51 and 227 properties per loan; and had issuer all-in debt yields of 8.5% and 8.7%.
Three loans in the pool of B2R's 2015-2 deal — Maynada Blue, Conrex and Camillo — are part of a split-loan, pari passu structure and combined account for 15.6% of the pool balance.
The Maynada Blue loan, which accounts for 9.6% of the pool, will be serviced under the pooling and servicing agreement for this transaction; the non-trust component is expected to be contributed to future transactions.
The controlling notes for the Conrex (4.9%) and Camillo (1.0%) loans were contributed to B2R's previous deal, 2015-1.
Formed in 2013 by The Blackstone Group, B2R provides mortgages for property investors with a focus on portfolios of single-family homes and small multifamily properties.
