American Homes 4 Rent tightens guidance on SFR bond

Mon May 12, 2014 11:21am EDT

NEW YORK, May 12 (IFR) - American Homes 4 Rent has narrowed price guidance on its US$482.7m six-tranche home rental bond offering, just the third trade of its kind in the new asset class.

The issuer tightened guidance by 5bp on the two top-rated tranches, with the Triple A rated portion revised to L+ 110bp-115bp from early talk of L+115bp-120bp and the Double A slice revised to L+145bp-150bp from L+150bp+155bp.

It also narrowed guidance on the next two classes by roughly 5bp, with the Single A plus-rated C notes now at L+190bp area and the split rated D tranche now at L+225bp area.

Prices were tightened even more aggressively on the two lowest-rated tranches, with the Triple B rated E notes now in the L+270bp area from 280bp and the Double B rated F piece at L+360bp area from L+380bp.

Goldman Sachs (structuring), JPMorgan and Wells Fargo are co-lead managers on the trade.

The new trade would be just the third in the nascent single-family rental (SFR) bond market.

Roughly a dozen large institutional buyers dominate the sector, buying up US foreclosed homes at bargain prices to revamp as rentals. (Reporting by Joy Wiltermuth; Editing by Marc Carnegie)

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