KBRA Assigns Preliminary Ratings to Bridge 2024-SFR1 Securitization

KBRA has assigned preliminary ratings to six classes of Bridge 2024-SFR1 single-family rental pass-through certificates.

Bridge 2024-SFR1 is a single-borrower, single-family rental (SFR) securitization collateralized by a $265 million loan secured by first-priority mortgages on 1,130 income-producing single-family homes. The fixed-rate loan requires interest-only payments over its four-year term. This transaction marks the second KBRA-rated securitization issued by Bridge.

The underlying single-family rental properties are situated in or near 16 Core Based Statistical Areas (CBSAs) across nine states. The top three CBSAs constitute 41.5% of the portfolio, with Atlanta (18.6%), Jacksonville (13.2%), and Charlotte (9.6%) being the largest. The aggregate Broker Price Opinion (BPO) value of the underlying homes is $331.2 million, resulting in an 80.0% Loan-to-Value (LTV) ratio. KBRA adjusted the BPOs, yielding an aggregate value of $314.6 million, which represents a 5.0% reduction from the nominal BPO value. The adjusted LTV based on KBRA’s BPO value is 84.2%.

KBRA utilizes a hybrid analysis to evaluate SFR transactions, incorporating elements from both its CMBS and RMBS methodologies. Given that the properties generate cash flow from tenant rental payments, CMBS methodologies are used to determine the loan’s probability of default (PD). For loss given default (LGD), KBRA assumes the underlying properties would be liquidated in the residential market. Home price stress scenarios are applied using RMBS methodologies. This hybrid approach is detailed in KBRA’s U.S. Single-Family Rental Securitization Methodology.

To access ratings and relevant documents, click here.

Click here to view the report.

Methodologies

  • CMBS/RMBS: U.S. Single-Family Rental Securitization Methodology
  • Structured Finance: Global Structured Finance Counterparty Methodology
  • ESG Global Rating Methodology

Disclosures

Further information on key credit considerations, sensitivity analyses, and ESG factors influencing the credit rating or outlook can be found in the full rating report referenced above.

Descriptions of all substantially material sources used to prepare the credit rating and the methodologies (including any material models and sensitivity analyses of the relevant key rating assumptions) are available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be found here.

Additional disclosures related to this rating action are available in the Information Disclosure Form(s) referenced above. For more information on KBRA’s policies, methodologies, rating scales, and disclosures, visit www.kbra.com.

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