Colony Starwood Adds Risk Retention to RMBS

A Colony Starwood rental in Texas; the state represents 12.9% of the portfolio’s BPO value.

SCOTTSDALE, AZ—Single-family rental REIT Colony Starwood Homes said Tuesday evening it had priced its fifth securitization, a $509.1-million floating rate loan. The sale, which is expected to close on or about June 7, marks two firsts: it’s Colony Starwood’s first since the $7.7-billion merger of Starwood Waypoint Residential Trust and Colony American Homes closed in January and, as Trepp reported earlier this week, it’s the first to include a risk-retention class of notes.

That risk-retention tranche, $26.8 million of debt that the REIT is holding, has not been rated by any of the major ratings agencies. The remainder of securitization, backed by mortgages on approximately 3,560 single-family homes, consists of $266.32 million of class A notes, $58.75 million of class B, $47 million of class C, $43.08 million of class D, $70.5 million of class E and $23.5 million of class F.  Kroll Bond Rating Agency, Moody’s Investors Service and Morningstar Credit Ratings have assigned provisional ratings to most of these classes, although Moody’s left classes E and F unrated.