Kroll Bond Rating Agency (KBRA) assigns preliminary ratings to seven classes of certificates issued in the CoreVest American Finance 2019-1 (CAF 2019-1) securitization. This transaction will be the eleventh multi-borrower, single-family rental (SFR) securitization issued in the U.S. to date and the eighth issued by CoreVest American Finance (formerly Colony American Finance).
CAF 2019-1 is a $317.1 million multi-borrower SFR securitization that will be collateralized by 74 fixed-rate loans secured by first priority mortgages on 3,793 rental units in 3,057 income-producing single-family, 2-4 family, and multifamily properties. The properties are located in 30 states, with the largest five exposures comprised of Arkansas (10.5%), Florida (8.8%), South Carolina (8.6%), New Jersey (8.1%), and Pennsylvania (7.4%). The loans have principal balances ranging from $0.4 million to $22.6 million for the largest loan in the pool. The five largest loans represent 29.6% of the initial pool balance, while the ten largest loans represent 47.2%.
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.
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.
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|Class||Rating||Balance (USD)||Rating Action|
|1 Notional balance.|
|2 To satisfy the US risk retention requirements, the transaction sponsor will retain an eligible horizontal residual interest consisting of the Class F, Class G, and Class H certificates, representing at least 5.0% of the fair value of all non-residual interests issued on the closing date.|
To access ratings, reports and disclosures, click here.
Related Publications: (available at www.kbra.com)
- CoreVest American Finance 2019-1 Pre-Sale Report
- CoreVest American Finance 2019-1 Representations and Warranties Disclosure
- U.S. Single-Family Rental Securitization Methodology
- Methodology for Rating Interest-Only Certificates in CMBS Transactions
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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.
Lee, Associate Director
Tegen, Senior Director
Maheshwari, Associate Director
Bhasin, CFA, Senior Managing Director