First Rated REO-to-Rental Deal Coming Soon?

Blackstone and Deutsche Bank are very close to marketing the first REO-to-rental securitization that will be rated, confirmed a source familiar with the deal.

Over the past two years several ratings agencies have released comments regarding potential challenges and risks to rental securitizations. Morningstar in September released a methodology document and a model guide designed to outline its process for new issue and surveillance ratings of securities backed by pools of single-family rental properties.

The deal will be backed by $500 million in single-family home rental properties, several market reports have indicated. Deutsche Bank did not comment on this.

The deal could be structured with senior notes rated by at least one company, according to a Reutersreport.

Blackstone has become the largest investor in the single-family home rental space through its fund investments in Invitation Homes.

Invitation Homes has invested approximately $5.5 billion in the space, a report published by Keefe, Bruyette Woods in September says. The fund has a $3.6 billion credit facility available through Deutsche Bank.

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