Kiavi, one of the nation’s largest private lenders for residential real estate investors, closed a $350 million unrated securitization of residential transition loans (RTLs), the company announced on Monday.
The loans bundled in the securitization were mostly investment property loans used for fix-and-flip transactions. This securitization marked Kiavi’s 16th such transaction and elevated the company’s total issuance to more than $4 billion since it launched its securitization program in 2019.
The deal drew significant interest from institutional investors and made it Kiavi’s largest securitization since November 2021. In the context of the transaction, investors will benefit from a two-year revolving period during which they can reinvest their principal payoffs to purchase additional newly originated loans.
Nomura Securities International was the primary entity responsible for structuring the deal. Barclays Capital and Performance Trust Capital Partners were joint bookrunners and co-lead managers on the transaction.
“We’re thrilled to apply this capital to help more and more real estate investors scale their businesses while creating move-in ready homes for millions of Americans,” Arvind Mohan, CEO of Kiavi, said in a statement.
“Kiavi’s platform and unique use of AI, data, and machine-learning models are significant contributors to our consistent track record of performance, which has helped us build and grow reliable institutional demand for Kiavi’s RTL assets over the past five years. We aim to build upon our technology and AI capabilities to further serve our customers and drive our performance as we continue to grow.”
The deal followed on the heels of a $300 million securitization by Kiavi in January. The lender also communicated that it funded $4 billion in fix-and-flip loans in 2023, a company record for a calendar year, despite the challenging housing market.
According to Attom’s home flipping report for third-quarter 2023, the national flip rate declined for a second straight quarter to its lowest point in two years. But home flips still represented 7.2% of all home purchases in Q3 2023, higher than the typical share seen since 2000.
