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CoreVest, Amherst add to first-quarter SFR MBS pipeline

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CoreVest American Finance and Amherst Financial have each launched new securitizations of single-family rentals, following the pricing Wednesday of the first SFR transaction of the year by Progress Residential.

According to presale reports, CoreVest will sell $344.3 million in bonds backed by a multiborrower portfolio of investor and developer loans for single-family residential dwellings as well as multifamily properties.

The CoreVest American Finance 2020-1 transaction involves 129 loans for 2,444 single-family and multifamily properties. The transaction includes two senior-note tranches with preliminary AAA ratings from Kroll Bond Rating Agency and Fitch Ratings.

Meanwhile, Amherst Residential will issue notes totaling $537.1 million backed by a single five-year loan secured by the aggregate value of 2,564 single-family residential properties, according to Moody’s Investors Service. The properties being sold into the trust are owned by Amherst and Luxor Capital Group. The Amherst homes are owned in 14 states.

Moody’s notes the high debt level (95% of the aggregate broker price opinion value of the homes) of Amherst’s deal, making it one of the highest-leverage SFR transactions the ratings agency has rated.

Moody’s has assigned preliminary Aaa ratings to a $166.49 billion Class A tranche.

The two deals along with Progress Residential’s newly closed $472 million transaction adds up to $1.35 billion in 2020 volume for a fledgling asset class that has sold $9.76 billion in publicly rated securities in 2018 and 2019 combined, according to Finsight.com.

Progress’ deal included a $186.3 million Class A notes tranche that priced at par with a fixed-rate coupon of 1.73%.

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Mortgage backed securities: Single family rental