American Homes 4 Rent to Raise $500M on Rental Property Notes

Mortgage & Real Estate

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American Homes 4 Rent in Agoura Hills, Calif., expects to raise about $488 million from the sale of rental revenue backed securities.

Gross proceeds from the sale, American Homes explained in a press release Thursday, are intended to help reduce the company’s long-term cost of capital.

Following the issuance and pricing of its second securitization transaction, American Homes said in the release, it plans to sell to unspecified third parties single-family rental pass-through certificates that are backed by a commercial mortgage loan that is secured by 4,487 single-family residential properties that have been sold to an affiliate.

The certificates have an initial fixed weighted average coupon rate of 4.386% for a 10-year term.

“Other than the class F certificates,” all certificates will be offered and sold in the United States, unless interested buyers are exempt of certain securities sales restrictions required by the Securities Act, the company said.

The sale is expected to close on or about Sept. 19.

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