Colony American Homes said it priced its second securitization of single-family rental homes with a duration-weighted blended interest rate of LIBOR plus 164 basis points.
The company did not indicate how each tranche priced. In April, the Scottsdale, Ariz.-based company sold $513 million in bond backed by its single family home rentals, with a blended interest rate of LIBOR plus 178 basis points.
Colony American Home 2014-2, issued $558.5 million of securities that are backed by a single loan secured by a pool of 3,727 single-family rental properties. The loan is interest only and has a two-year term with three 12-month extension options.
J.P Morgan and Credit Suisse are the lead managers on the deal.
Morningstar and Kroll Bond Ratings assigned preliminary ratings to the six tranches to be issued from the trust. The $291 million, class A notes are rated AAA’/ AAA’; the $62 million class B notes are rated AA+’/ AA+’; the $50.9 million class C notes are rated A+’/ A’; the $47.8 million class D notes are rated BBB+’/ BBB+’; the $85 million class E notes are rated BBB-/ BBB-’; and the $21.5 million class F notes are rated BB+’/ BB+’.
The underlying properties are one-to-four-unit homes located in seven states, with the top three states representing 73% of the portfolio (California (33.0%), Florida (27.2%), and Georgia (12.6%).
According to the Morningstar presale report, the average cost basis per property is $196,499 and the average current value, as determined by a broker price opinion, is $214,076. The average age of the properties is approximately 24 years and the majority of the properties have three or more bedrooms (96.1%).
Since 1991, Colony has invested approximately $54 billion in various investments and currently has about $20 billion of real estate assets under management. It owns over 16,700 properties across nine different states as of May 31, 2014.