Tricon Capital Group, which has been acquiring single-family rental homes in the U.S. since 2012 through Tricon American Homes, is planning its first securitization.
A source familiar with the deal said the structure is expected to be “fairly consistent” with other securitizations of single-family homes held by a single borrower. Deutsche Bank is the lead manager. The bank is also the largest lender in Tricon American Homes’ $400 million credit facility.
Moody’s Investors Service is expected to rate the deal as well as two other ratings agencies, the market source confirmed.
Tricon Capital is a publicly traded REIT that operates in two segments: asset management and single-family rentals. As of 4Q2014, the company had $2.5 billion of assets under management. The asset management business provides local operating partners with equity and mezzanine financing for residential land development, single- and multi-family construction, and retail development. The single-family rental business focuses on acquiring, renovating and leasing single-family homes.
As of Q4 2014 the issuer owned 5,000 homes in its single family rental portfolio that are located throughout the U.S. with the top five markets being Northern and Southern California, Phoenix, Reno and Las Vegas. The homes are on average sized at 1,484 square feet and generate an average monthly rental income of $1,130.
The current portfolio has an overall occupancy rate of 84% and homes owned greater than six months have an occupancy rate of 91%.
On April 15, the issuer completed a $150 million acquisition of a portfolio of 1,385 single- family rental homes situated in Texas, North Carolina, and South Carolina from a U.S.-based private equity fund manager.