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Progress Residential returns to SFR securitization market

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Progress Residential is sponsoring a fourth securitization of single-family home rental income for 2019.

The $428 million Progress Residential 2019-SFR4 transaction will feature eight classes of notes secured by a single loan taken out by the Progress, which is organized as a real estate investment trust. The notes stack includes a $188.2 million Class A tranche with preliminary triple-A ratings from Moody’s Investors Service and Kroll Bond Rating Agency.

The five-year loan, originated by Goldman Sachs, is secured by the cash flow from 2,205 single-family rental properties located in 16 metropolitan statistical areas. The average allocated loan amount for each property is $194,328, according to Moody’s.

The deal was initially launched last week, but Progress revised the expected benchmark rate that prompted Kroll to lower its initial ratings on the Class B and C notes by one notch. The $31.9 million in Class B notes now have an expected rating of AA and the $26 million Class C notes are rated A+.

Goldman, Deutsche Bank and BofA Merrill Lynch are serving as placement agents for the deal.

Progress Residential has been investing in and managing in single-family rental homes since 2013.

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Mortgage backed securities: Single family rental