Kiavi Funding has returned to sell $350 million in asset-backed securities (ABS), secured by payments on loans extended to residential real estate investors, or residential transition loans (RTLs) the company announced.
With a June closing, the deal brings Kiavi's half-year issuance to almost $1 billion. It sold all its offered notes through three tranches of classes A1, A2 and M notes, according to a company statement. LHOME 2024-RTL3 includes a two-year revolving period. During this window, principal payoffs can be reinvested to purchase additional, newly originated loans.
The 2024 RTL3 series is Kiavi's 18th transaction under its LHOME securitization shelf, which brings the company's total issuance to more than $4.7 billion in offered notes, since it began securitizing the loans in 2019. Barclays Capital was on the deal as sole structuring agent, and as joint bookrunner. Nomura Securities International and Performance Trust Capital Partners joined Barclays as joint bookrunners on the deal and they were also co-lead managers, according to Kiavi.
It was unrated, which is typical for many ABS deals secured by RTLs.
But recently rated RTL transactions have gotten traction in the securitization market, allowing issuers to sell their deals at materially lower rates compared with similar, rated deals—and upsize them in the process.
Kiavi Funding would consider making rated RTL securitizations part of its capital execution strategy over time, according to Kiavi CEO Arvind Mohan.
"Kiavi's RTL assets have a strong track record and proven performance for our institutional investors," Mohan told Asset Securitization Report in an email response to questions about the deal. "We continue to see more demand overall given the growing interest in RTL assets now that ratings agencies are active in our space."
