Kroll Bond Rating Agency Assigns Preliminary Ratings to Colony American Finance 2015-1

NEW YORK--()--Kroll Bond Rating Agency (KBRA) has assigned preliminary ratings to six classes of notes of Colony American Finance 2015-1 (CAF 2015-1). This transaction is the third multi-borrower single-family rental (SFR) securitization issued in the U.S. to date, and the first to be issued by Colony American Finance.

CAF 2015-1 is a $252.0 million multi-borrower SFR securitization that will be collateralized by 69 fixed rate loans secured by first priority mortgages on 4,140 rental units in 3,488 income-producing single-family, 2-4 family, and multifamily properties. The properties are located in 21 states, with the largest five exposures comprised of Ohio (20.9%), Texas (15.6%), Georgia (11.8%), Florida (10.9%) and California (10.7%). The loans have principal balances ranging from $0.2 million to $20.4 million for the largest loan in the pool, Camillo A (8.1%), a 191 unit (190 assets) portfolio. The five largest loans, which also include Huber Heights A (7.9%), Huber Heights B (7.9%), Camillo B (6.2%) and Intrepid (5.0%), represent 35.2% of the initial pool balance, while the ten largest loans represent 52.7%.

KBRA used a hybrid analysis to evaluate this transaction, which incorporates elements of CMBS and RMBS methodologies, as the underlying real estate contains commercial and residential characteristics. As the properties generate a cash flow stream from tenant rental payments and the loans do not fully amortize, CMBS methodologies are used to determine the probability of default and refinance risk. However, since there is a broader demand for homes underlying SFR securitizations in the residential owner-occupied homes market, elements of RMBS methodologies are used to determine loss given default.

For further details on KBRA’s analysis, please see our Pre-Sale Report, entitled Colony American Finance 2015-1, which was published today 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.

                   
Class     Rating     Balance (USD)     Rating Action
A     AAA (sf)     $168,222,000     Preliminary
B     AA (sf)     $14,491,000     Preliminary
C     A (sf)     $14,176,000     Preliminary
D     BBB (sf)     $21,421,000     Preliminary
E     BBB- (sf)     $5,986,000     Preliminary
F     BB (sf)     $8,505,000     Preliminary
G     NR     $6,301,000     Preliminary
Income Notes     NR     $12,916,067     Preliminary
           

Representations & Warranties Disclosure:

All Nationally Recognized Statistical Rating Organizations are required, pursuant to SEC Rule 17g-7, to provide a description of a transaction’s representations, warranties and enforcement mechanisms that are available to investors when issuing credit ratings. KBRA’s disclosure for this transaction can be found here.

About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

Contacts

Analytical:
Kroll Bond Rating Agency

Daniel Tegen, 646-731-2429
dtegen@kbra.com
or
Pramit Sheth, 646-731-2330
psheth@kbra.com
or
Nitin Bhasin, CFA, 646-731-2334
nbhasin@kbra.com
or
Akshay Maheshwari, 646-731-2394
amaheshwari@kbra.com
or
Follow us on Twitter!
@KrollBondRating

Contacts

Analytical:
Kroll Bond Rating Agency

Daniel Tegen, 646-731-2429
dtegen@kbra.com
or
Pramit Sheth, 646-731-2330
psheth@kbra.com
or
Nitin Bhasin, CFA, 646-731-2334
nbhasin@kbra.com
or
Akshay Maheshwari, 646-731-2394
amaheshwari@kbra.com
or
Follow us on Twitter!
@KrollBondRating