NEW YORK, Oct 24 (IFR) - Deutsche Bank, Credit Suisse and JP
Morgan will begin marketing the first-ever bond backed by US
home-rental cashflows, a US$500 million trade for private-equity
giant Blackstone, next Wednesday.
The banks will meet with investors in New York on October
30, and then visit Boston and Los Angeles the following two
Deutsche bank is the lead structurer, while Credit Suisse
and JP Morgan will be acting as joint leads for the transaction.
The deal, titled Invitation Homes 2013-SFR1, will receive
ratings from Kroll, Morningstar, and Moody's. At least one of
those ratings will be Triple A.
The deal will be secured by individual mortgage liens on
each underlying property rather than an equity pledge in the
property-owning special purpose vehicle (SPV), allowing for the
creation of a so-called real estate mortgage investment conduit
(Remic) structure, according to sources close to the deal.
Remics, which are also used in CMBS, allow for the pooling
of a diverse set of loans from different originators and offer
flexibility in assembling a security.
Rating agencies had preferred that mortgages were in place
as legal instruments in any potential REO-to-rental
securitization structure so that bondholders do not get shut out
of payments in case competing liens were placed on any
Agencies cautioned that in the absence of a recorded
mortgage, bondholders could be on the hook if an issuer/sponsor
puts an SPV owning the homes into bankruptcy.
Therefore, despite the recording fees and administrative
costs involved with filing individual mortgages on each
property, the mortgage structure seemed the best route for the
first single-family rental securitization deal, sources said.