Blackstone and Deutsche Bank are very close to marketing the first securitization of rental properties, and the deal will be rated, a person familiar with the deal confirmed.
Over the past two years, several rating agencies have release commentary discussin the challenges and potentail risks to securitizing real-estate owned, or repossed, properties that have been purchased and converted to rentals. In September, Morningstar published a methodology document and a model guide designed to outline the process it will apply to the new issue and surveillance ratings of securities backed by pools of single-family rental properties.
Several market reports have indicated that the Blackstone deal will be backed $500 million in single family home rental properties. Deutsche Bank did not comment on the story.
A Reuters report said that the deal is expected to be structured with senior notes rated by at least one ratings company.
Blackstone has become the largest investor in the single family home rental space through its fund investments in Invitation Homes.
A report published by Keefe, Bruyette & Woods in September said that Invitation Homes has invested approximately $5.5 billion in the space. The fund has a $3.6 billion credit facility available through Deutsche Bank.