Investments

Single-family rental securitization market expands to federally subsidized rents

Rental securitization market growing

After launching its first securitization backed by single-family rental homes a little more than a year ago, Tricon American Homes is helping lead a new type of bond offering in the rental home bond market.

According to an article in Bloomberg by Matt Scully, Wall Street’s booming business of selling bonds tied to rental-homes is taking a new twist and adding government-subsidized rent checks to the mix.

From the piece:

A unit of Tricon Capital Group Inc. is planning its second bond offering that’s partially backed by rental payments from tenants who receive assistance under the federal Section 8 program, according to Kroll Bond Rating Agency. The $363 million note offering for Tricon American Homes is being arranged by Deutsche Bank AG and is tied to 3,444 single-family rental properties, a person familiar with the deal said.

A past report from Kroll Bond Rating Agency noted that Tricon Capital was founded in 1988 and completed its initial public offering in May 2010.

Kroll stated that Tricon Capital has “substantial experience in the residential sector in North America,” and began acquiring U.S.-based single-family rentals in April 2012.

According to Kroll’s report, Tricon American focuses on the acquisition, renovation, leasing, and management of single-family rental homes for rental income and long-term capital appreciation.

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