FeatherStone Investment Group said it is weeks away from announcing the final details of its REO-to-Rent securitization platform. Kevin Blaser has been hired to take charge of the securitizations of the company’s REO-to-Rental portfolio.
Blaser is the new managing director of structuring and trading. He brings over 20 years of fixed income experience, namely in the structured finance space, the company said in a press release.
The company is in negotiations to bundle monthly rental payments on about 1,000 to 3,000 homes. The size of the FeatherStone Investment Group deal is expected to be around $100 million to $300 million.
The bonds issued through FeatherStone’s program are anticipated to have a 5-year maturity, a floating rate coupon, and at least one rating by a major ratings service.
FeatherStone has worked with several strategic partners to build a platform that sources, manages, finances, and securitizes REO-to-Rental assets into a new class of securities.
“[The] program allows investors to participate in both the immediate rental cash flow as well as the potential capital gains from the sale of the component properties in the deal,” according to the press release.
Other securitized REO-To-Rental deals currently being considered only pay investors coupon and principal payments derived from rents on the properties.
According to a July 30, Wall St. Journal report Deutsche Bank is also close to launching a deal that securitizes the monthly rental payments on about 1,500 to 1,700 of REO-to-Rent homes in the Blackstone Group portfolio.
One source at a ratings agency confirmed that Deutsche Bank and Blackstone are in dialogue with the ratings agency to see what level of credit enhancement might be required.
The Wall St Journal reported that the deal is expected to come to market in September, but the ratings agency source said “it wouldn’t be shocking if it took longer.”