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KBRA Assigns Preliminary Ratings to Invitation Homes 2018-SFR4Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to six classes of Invitation Homes 2018-SFR4 (IH 2018-SFR4) single-family rental pass-through certificates. IH 2018-SFR4 is a single-borrower, single-family rental (SFR (News - Alert)) securitization that will be collateralized by a $960.3 million loan secured by first priority mortgages on 5,393 income-producing single-family homes. The entire subject portfolio consists of rollover properties that were included in two prior securitizations. Of these properties, 2,748 homes (53.9%) were previously securitized in CAH 2015-1, while 2,645 homes (46.1%) were previously included in CSH 2016-1. Both of these deals are expected to pay-off in full in conjunction with the closing of the subject transaction. The floating-rate loan will require interest-only payments and have a fully extended loan term of seven years (two-year initial term with five, 12-month extension options). IH 2018-SFR4 will be the fifth single-borrower SFR securitization issued by Invitation Homes following the merger with Starwood Waypoint Homes. Including the current deal, Invitation Homes and its predecessor entities will have issued a total of 19 SFR securitizations. Similar to recent IH securitizations, the transaction features a voluntary substitution feature whereby the issuer is permitted to replace any property or sub-portfolio of properties with a substitute property or portfolio of occupied detached single-family homes up to a maximum of 5.0% of the properties in the underlying portfolio, by count, as of the closing date. As such, the characteristics of the collateral can change over time. As the substitution threshold is by count, it is conceivable that up to 11.0% of the pool, by value, could be substituted if the assets that were removed from the pool were comprised of those with the highest BPO values. The underlying single-family rental properties are located in or near 30 Core Based Statistical Areas (CBSAs) across eight states. The top-three CBSAs represent 39.9% of the portfolio and include Atlanta (17.8%), Las Vegas (14.3%), and Denver (7.9%). The aggregate BPO value of the underlying homes was $1.5 billion, yielding an LTV of 65.0%. KBRA adjusted the BPOs, which yielded an aggregate value of $1.3 billion. This represents a 11.1% haircut to the nominal BPO value. The resulting LTV based on KBRA's adjusted BPO value was 73.1%. KBRA used its U.S. Single-Family Rental Securitization Methodology to evaluate the transaction. The methodology leverages elements of KBRA's commercial mortgage-backed securities and residential mortgage-backed securities criteria due to the fact that the collateral underlying an SFR transaction has both commercial and residential characteristics. As the properties generate a cash flow stream from tenant rental payments, CMBS methodologies were used to determine the loan's probability of default. To determine loss given default, KBRA assumed the underlying collateral properties would be liquidated in the residential property market. For further details on KBRA's analysis, please see our pre-sale report, entitled Invitation Homes 2018-SFR4, which is published at www.kbra.com. The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.
Representations & Warranties Disclosure All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC (News - Alert) Rule 17g-7, to provide a description of a transaction's representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA's disclosure for this transaction can be found in the report available here. To access ratings, reports and disclosures, click here. Related Publications: (available at www.kbra.com)
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Twitter About KBRA and KBRA Europe KBRA is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus, is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA. View source version on businesswire.com: https://www.businesswire.com/news/home/20181022005735/en/ |
