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Tricon Prices $553M Securitization at Record-low Weighted Average Coupon of 2.34%

Photo credit: Tricon

Tricon Residential, a rental housing company catering to the middle-market demographic throughout the United States and Canada, announced that its single-family rental joint venture (the “JV,” in which Tricon holds a one-third interest) has priced its 2020-SFR1 securitization transaction.

Tricon’s largest securitization transaction to date, comprising six offered classes of fixed-rate certificates with a total face amount of US$553 million, was priced at a record-low (for a single- family rental securitization) weighted average coupon of approximately 2.34% with a term to maturity of six years. The anticipated transaction proceeds represent 72.5% of the value of the securitized portfolio of 3,540 single-family rental properties owned by the JV. The transaction is expected to close on or about July 21, 2020.

The transaction proceeds will be used to refinance existing JV debt and are expected to result in approximately $55 to $60 million of net proceeds to the JV to be used primarily for future acquisitions of single-family rental homes. The JV’s acquisition program is expected to resume in Q3, subject to market conditions and following a three month pause due to the COVID-19 pandemic.

“I would like to congratulate our team and thank our capital market partners for achieving incredibly attractive terms on Tricon’s largest securitization financing to date,” said Gary Berman, president and CEO of Tricon. “The transaction was placed with 40 investors, including 21 new investors to Tricon, and was approximately 5 times over-subscribed with significant interest across all tranches. We see the strong demand and record-low pricing for Tricon as validation of our middle market strategy, our strong operating performance, and the resilience of our single-family rental business in today’s challenging economic environment.”

The offering of certificates is being made by Deutsche Bank Securities Inc. as sole structuring agent, joint bookrunner, and co-lead manager, BofA Securities, Inc. as joint bookrunner and co- lead manager and Morgan Stanley & Co. LLC as joint bookrunner and co-lead manager. The various classes of offered certificates have been rated on a preliminary basis by Moody’s Investor Services and Kroll Bond Rating Agency.

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