Progress Residential priced its latest single family rental securitization tighter than the issuer’s previous deal and the most recent single family rental, Colony American Homes 2015-1, which priced last week.
The issuer paid 105 basis points over interpolated swaps on the 5-year, triple-A rated, class A notes, yielding investors 2.7%. At the beginning of the year, Progress priced a similarly rated, 5-year, class A bond at a spread of 150 basis points over Libor.
However Progress Residential 2015-SFR2, is backed by a fixed-rate, five year loan; the issuer’s previous deals are backed by floating rate loans, with an extended term of five-years.
Colony American Homes, which last week priced its single family rental securitization called Colony American Homes 2015-1, priced the five-year, triple-A rated, class A notes at 120 basis points over one month Libor. Colony is also backed by an underlying floating rate loan, with an extended term of 5 years.
Further down the credit curve, Progress priced $30 million of triple-B plus, clas D notes at 200 basis points over interpolated swaps, $52 million of triple-B notes priced at 275 basis points over interpolated swaps and $48 million of double-B minus, class F notes priced at 340 basis points over interpolated swaps. Moody’s Investors Service rated the senior notes,; Kroll Bond Ratings and Morningstar rated the entire capital structure.
Deutsche Bank, Goldman Sachs and BofA Merrill Lynch are the led managers.
Progress’ 2015-2 transaction pools 3,317 properties located in nine states, with the largest concentration by broker price opinion value in Florida (36.2%). The largest metropolitan statistical area, or MSA, is Atlanta, GA (14.0%), followed by Tampa, FL (13.9%), according the Morningstar presale report.
The issuer is a private equity investment firm dedicated to the acquisition, leasing, and management of single-family residential properties throughout the U.S. The company was launched in September 2012 and is managed by a subsidiary of Pretium Partners, LLC, which was founded by Donald Mullen, Jr. and Curt Schade in 2012.
As of March 31, 2015, Progress had invested in excess of $2.2 billion in its portfolio of approximately 13,300 homes. The portfolio is comprised exclusively of single-family homes located in 26 markets across 11 states.