San Francisco-based private lender Kiavi said Monday it has completed a new multimillion-dollar securitization of residential transition loans (RTLs), bringing its six-month issuance volume to nearly $1 billion.
The $350 million unrated securitization announced this week joins similar transactions since earlier this year. The company announced a $350 million bundle of RTL in February, followed by a $300 million deal in May. Kiavi has securitized more than $4.7 million in short-term RTL (also known as fix-and-flip loans or bridge loans) across 18 transactions since 2019.
The company said its latest offering “attracted broad institutional interest” and sold out. Like its previous transactions, the latest deal includes a two-year revolving period during which investors can reinvest principal proceeds to purchase new loans.
“We are pleased to announce yet another securitization to support our growth plans to enable more real estate investors to scale their businesses with reliable, competitively priced capital,” Kiavi CEO Arvind Mohan said in a statement. “This securitization further enhances our capital advantage, bringing our half-year issuance to nearly $1 billion. Our consistency, track record and performance continue to garner significant institutional demand for Kiavi's RTL assets.”
Barclays Capital acted as structuring agent for the transaction, while Nomura Securities International and Performance Trust Capital Partners acted as joint bookrunners and joint lead managers.
Like other housing types, the single-family rental and fix-and-flip sectors have been sluggish due to rising mortgage rates and relatively low inventory levels, but home flippers' gross profit margins are expected to reach 30.2% in the first quarter of 2024, the third time in four quarters that the figure has increased, according to the latest data from Atom.
While most real estate investors are individuals and small businesses, institutional investors have come under fire for buying up large amounts of homes, driving up prices and shrinking supply in some parts of the country. Senate Democrats introduced federal legislation this month that would require large corporations and private equity firms to report these transactions to federal regulators for antitrust review.