Rialto Capital is in the market with $147 million of bonds backed by nonperforming commercial and residential mortgages, according to a presale report published by Kroll Bond Rating Agency.
The deal, RIAL Series, 2014-LT6, is a liquidation vehicle that monetizes recoveries from 1,032 repossessed properties, nonperforming loans and a few performing loans with an aggregate unpaid principal balance of $524.5 million.
The properties were acquired for $196.5 million between February 2011 and December 2012 from eight regional lenders. Some 83% of the assets in this transaction were previously securitized by Rialto last year in a transaction dubbed RIAL 2013-LT2 transaction, which is expected to be paid in full on Sept. 22. And 32.8% of the assets are being rolled over a second time, having originally been securitized in the RIAL 2012-LT1 transaction, nearly all of which was resecuritized into RIAL 2013-LT2
The properties are a mix of commercial and multifamily (62.4%), land (22.3%), residential (12.8%) and other non-real-estate collateral (2.5%).
The securitization trust will issue $116.4 million of class A notes that Kroll expects to rate BBB-. They have with a final expected payment date of September 2024. There are also $30.9 million of class B notes and $49.1 million of equity interest, neither of which are rated by Kroll.
Interest on the notes is deferrable for one year.