Fidest – Agenzia giornalistica/press agency

Quotidiano di informazione – Anno 35 n°30

KBRA Assigns Preliminary Ratings to Progress Residential 2018-SFR3

Posted by fidest press agency su mercoledì, 19 settembre 2018

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to six classes of Progress Residential 2018-SFR3 (Progress 2018-SFR3) single-family rental pass-through certificates. Progress 2018-SFR3 is a single-borrower, single-family rental (SFR) securitization that will be collateralized by a $662.4 million loan secured by first priority mortgages on 3,459 income-producing single-family homes, of which 3,418 properties (98.9%) were sourced from Progress 2016-SFR1. In conjunction with the subject transaction, Progress 2016-SFR1 was fully repaid on September 7, 2018, which is expected to be reflected in the September 2018 remittance report. The fixed-rate loan will require interest-only payments and have a five-year term. Progress 2018-SFR3 will be the ninth KBRA-rated SFR securitization issued by Progress.The subject transaction will be Progress’ first securitization to include a voluntary substitution feature that permits the issuer to replace any property or sub-portfolio of properties with a substitute property or portfolio of properties up to a maximum of 5.0% of the homes in the underlying portfolio, by count, as of the closing date. Progress is allowed to replace up to 172 properties over the remaining duration of the deal with occupied detached single-family homes. As the substitution threshold is by count, it is conceivable that up to 8.5% of the pool, by BPO value, could be substituted if the assets that were removed from the pool were comprised of those with the highest BPO values.If a Low DSC period has occurred with respect to loan component E, F or G and there are insufficient available amounts to pay full or partial interest on Loan Component F and/or loan component G then the due interest on these components will be deferred and added to the respective principal balance. While such deferrals are occurring, any excess cash flow will be held in a reserve account until the cash flows improve and the DSC threshold is met for two consecutive quarters.The underlying single-family rental properties are located in or near 20 Core Based Statistical Areas (CBSAs) across nine states. The top-three CBSAs represent 39.1% of the portfolio and include Tampa (16.2%), Atlanta (11.7%), and Phoenix (11.3%). The aggregate BPO value of the underlying homes was $794.7 million, yielding an LTV of 83.4%. KBRA adjusted the BPOs, which yielded an aggregate value of $726.1 million. This represents an 8.6% haircut to the nominal BPO value. The resulting LTV based on KBRA’s adjusted BPO value was 91.2%.


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