KBRA Assigns Preliminary Ratings to Progress Residential 2019-SFR4

Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.

Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to six classes of Progress Residential 2019-SFR4 (Progress 2019-SFR4) single-family rental pass-through certificates.

Progress 2019-SFR4 is a single-borrower, single-family rental (SFR) securitization that will be collateralized by a $428.5 million loan secured by first priority mortgages on 2,205 income-producing single-family homes. The fixed-rate loan will require interest-only payments and will have a five-year term. Progress 2019-SFR4 will be the 11th KBRA-rated SFR securitization issued by Progress Residential.

The underlying single-family rental properties are located in or near 17 Core Based Statistical Areas (CBSAs) across nine states. The top-three CBSAs represent 37.3% of the portfolio and include Orlando (13.0%), Las Vegas (12.6%), and Phoenix (11.7%). The aggregate BPO value of the underlying homes was $473.5 million, yielding an LTV of 90.5%. KBRA adjusted the BPOs, which yielded an aggregate value of $448.4 million. This represents a 5.3% haircut to the nominal BPO value. The resulting LTV based on KBRAs adjusted BPO value was 95.6%.

The loans cash management structure features a Low DSC Period concept. 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 or the borrower prepays the loan in an amount causing the DSC threshold to be met.

KBRA used its U.S. Single-Family Rental Securitization Methodology to evaluate the transaction. The methodology leverages elements of KBRAs commercial mortgage-backed securities and residential mortgage-backed securities criteria due to the fact that the collateral underlying an SFR transaction has both commercial and residential characteristics. As the properties generate a cash flow stream from tenant rental payments, CMBS methodologies were used to determine the loans probability of default. To determine loss given default, KBRA assumed the underlying collateral properties would be liquidated in the residential property market.

For further details on KBRAs analysis, please see our pre-sale report, entitled Progress Residential 2019-SFR4, which is published at www.kbra.com.

The preliminary ratings are based on information known to KBRA at the time of this publication. Information received subsequent to this release could result in the assignment of final ratings that differ from the preliminary ratings.



Balance (USD)

Rating Action


AAA (sf)




AA+ (sf)




AA- (sf)




A- (sf)




BBB- (sf)




BB (sf)











1To satisfy the U.S. risk retention requirements, the loan sponsor will retain an eligible horizontal residual interest consisting of the Class H certificates, representing at least 5.0% of the fair value of all non-residual interests issued by the issuer on the closing date.

To access ratings, reports and disclosures, click here.

Related Publications: (available at www.kbra.com)


Twitter LinkedIn Download the iOS App YouTube

About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Analytical Contacts:

Teena Andrade, Associate

(646) 731-2457

[email protected]

Akshay Maheshwari, Director

(646) 731-2394

[email protected]

Daniel Tegen, Senior Director

(646) 731-2429

[email protected]

Nitin Bhasin, CFA, Senior Managing Director

(646) 731-2334

[email protected]