Merchants Capital has successfully completed the securitization of $630 million in bridge loans for healthcare commercial real estate. These loans were originated by VIUM Capital, a joint venture partner of Merchants, and closed on the balance sheet of its parent company, Merchants Bank, within the past 16 months. The purpose of these loans is to provide support for properties until they secure permanent financing through the U.S. Department of Housing and Urban Development.
The securitization pool includes 21 loans backed by 74 properties located in 15 states. These properties consist of various facilities such as skilled nursing homes, assisted living communities, memory care centers and independent living residences. On average, these loans have a loan-to-value ratio (LTV) of 69% and a debt yield above 15%.
In collaboration with ATLAS SP Partners acting as structuring agent and sole bookrunner , Merchants utilized a credit risk transfer structure to partner with an investment manager specializing in alternative assets to purchase junior securities comprising approximately 15%of this transaction’s value . As part of this purchase agreement ,the investor also retained first loss Risk Retention certificates as third-party purchaser.
Merchants Capital recently finalized its successful completion of securing $630 million worthof bridge loan investments for healthcare commercial real estate projects.The originator behind these funds was VIUM capital -a joint venture between merchants capital- which were then underwritten & processed via their parent company’s balance sheet; i.e., Merchant Banks over last sixteen months.These specific financial aids are intended towards supporting respective property owners till they can obtain permanent funding from US Dept.of Housing & Urban Development.
This particular portfolio consists twenty-one different credits that are collateralized against seventy-four distinct locations spread across fifteen states.This diverse range comprises several types like skilled nursing homes or assisted-living complexes along with memory-care units or even independent residential spaces.On average,the LTV stands at 69% with a debt yield of over 15%.
Merchants Capital, in collaboration with ATLAS SP Partners as structuring agent and sole bookrunner, has structured this deal as a credit risk transfer. They have also partnered up with an investment manager specializing in alternative assets to purchase the junior securities which make up approximately 15% of the total transaction value. As part of their agreement, the investor will retain first loss Risk Retention certificates as third-party purchaser.
