KBRA Assigns Ratings to Four Classes of Tricon Residential 2024-SFR3 Single-Family Rental Pass-Through Certificates
KBRA has assigned ratings to four classes of Tricon Residential 2024-SFR3 (TCN 2024-SFR3) single-family rental (SFR) pass-through certificates. TCN 2024-SFR3 is a securitization backed by a $550.5 million fixed-rate loan, secured by first-priority mortgages on 2,223 income-producing single-family homes. The loan requires interest payments only over its five-year term. This marks the 12th KBRA-rated securitization issued by Tricon Residential.
The properties involved are located in or near 33 Core Based Statistical Areas (CBSAs) across 10 states. The top three CBSAs—Atlanta (23.0%), Phoenix (15.2%), and Tampa (12.6%)—represent 50.8% of the portfolio. The total Broker Price Opinion (BPO) value of the properties is $758.0 million, resulting in a loan-to-value (LTV) ratio of 72.6%. After KBRA’s adjustments, which applied a 5.0% haircut, the aggregate BPO value is $720.1 million, and the adjusted LTV is 76.4%.
KBRA employs a hybrid analysis for evaluating SFR transactions, combining elements of both CMBS and RMBS methodologies. This approach reflects the commercial and residential characteristics of the underlying real estate. The analysis uses CMBS methodologies to assess the loan’s probability of default (PD) and RMBS methodologies to evaluate the loss given default (LGD), assuming liquidation in the residential property market under various stress scenarios. Details on this methodology can be found in KBRA’s U.S. Single-Family Rental Securitization Methodology.
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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 affecting the credit ratings can be found in the full rating report referenced above. Details on the material sources and methodologies used to prepare the credit rating are available in the Information Disclosure Form(s) located here.
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Additional disclosures regarding 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.
About KBRA:
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. KBRA has additional registrations with European and UK authorities and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.”
