Atlanta, GA – June 10, 2014 – FeatherStone Investment Group (“FSIG”) announced today that on behalf of six SFR rental portfolio sellers, one being a bank, they have issued their 1st unrated 144A ABS private placement rental bond. Since the offering is private no details are provided at this time.
Since our announcement in January regarding our rental securitization platform, whereby institutional investors could own the equity positions within the debt securitization, the response was very positive.
FeatherStone has now incorporated all of the recommendations we received from potential equity investors and created a proprietary and unique Sponsor Controlled Rating Agency Compliant SFR Securitization Platform.
Importance of the Sponsor for an AAA Credit Rating
The Sponsor of an SFR securitization holds the equity in the transaction. Typically, the Sponsor is responsible for developing the long-term strategy of the operating company and its ongoing capital requirements. The rating agencies will perform a comprehensive review of each Sponsor. The review includes an assessment of management’s prior work history and experience, with a focus on entities that operate in the real estate sector.
If the Sponsor is a hedge fund, family fund or private equity firm, our securitization platform includes a rated property management firm with a nationwide footprint.
The rating agencies believes that an institutional quality Sponsor is a credit positive, as these entities have the knowledge and financial capability to develop and support a new entity within an emerging asset class. While the rating agencies recognize that there is some incremental benefit to a strong Sponsor, there is no guarantee that the Sponsor will retain its equity position.
The next SFR rental securitization is now ready. FeatherStone, and its property management partners have identified $1.2 billion consisting of approximately 8,000 single-family rental properties, in states with appreciation expected in the double digits over the next five years. Qualified institutional investors (Sponsors) would have full control of the selection process, as well as ownership of the equity positions.
FeatherStone is not a property management firm, nor an investment fund backed by institutional investors. Rather, FeatherStone along with its strategic partners, including investment bankers has built a unique platform to efficiently structure, place, source, manage, finance, and package residential rental properties into a new class of debt and equity investments.
FeatherStone is also building a marketing distribution network consisting of specialized investment banking firms that are focused on advising real estate and alternative investment managers. These specialized placement agents have access to institutional investors that may qualify as a SFR rental securitization sponsor through private equity or debt placements.