Colony American Homes said it plans to issue an REO-to-Rental securitization early in 2014.
The securitization transaction will be backed by rental income from a portion of the Scottsdale, Arizona-based firm’s portfolio of single family rental homes. CAH said in a company press release that it has hired advisors to help in structuring the transaction.
The single-family rental company formed in 2012 by Colony Capital said that it also expanded the JP Morgan, Credit Suisse led credit facility to $1.2 billion. The credit facility was first announced in Sept. and was set at $500 million with an accordion feature that allowed for an increase in credit.
“Both of these events are major milestones in our company's continued growth,” said Justin Chang, Chief Executive Officer of CAH. “Funds raised from the securitization, combined with our existing private equity capital and the expanded credit facility, will further our ability to actively acquire homes in our selected markets and allow us to maintain top quality management of those homes.”
CAH will use the proceeds to build scale in its portfolio of single-family homes across the U.S. The Scottsdale, Arizona-based firm owns and manages over 15,000 homes for rent in Arizona, California, Colorado, Florida, Georgia, Nevada, and Texas. The company intends to originate as much as $2 billion in debt during its first year, with potential to do more, including loans of as much as $100 million.
CAH’s securitization announcement follows a similar announcement made by American Homes 4 Rent (AMH) on Nov. 11. AMH said it was amid the process of structuring and negotiating a securitization transaction secured by a portion of its portfolio of single-family properties. That deal is slated to come to market within the next 90 days.