Groundfloor Closes Second RTL Securitization as Demand Grows for HY, Short-Duration Credit
Groundfloor Finance, Inc. has successfully closed its second securitization of deferred pay residential transitional loans (RTLs) just five months after its inaugural issuance in December 2024. The deal was oversubscribed, highlighting strong institutional demand for high-yield, short-duration credit products, despite ongoing capital market volatility.
According to Nick Bhargava, co-founder of Groundfloor, now is the ideal time to introduce asset-backed securities of this nature, stating to Connect Money: “They are higher yield, shorter duration, and backed by a stable asset class. The U.S. is still under-housed, so primary housing demand should remain relatively healthy in accessible price segments.”
Performance Trust Capital Partners, LLC served as the sole structuring agent and bookrunner for the transaction. The offering closely mirrors Groundfloor’s inaugural deferred pay RTL securitization, which was the first of its kind in the market, featuring a single class of securities secured by residential transitional loans originated and serviced by Groundfloor.
Bhargava emphasized the broader economic impact of Groundfloor’s securitization strategy, adding, “Securitizing credit is improving credit availability in markets that used to be relatively illiquid, while providing attractive returns. There is a net economic benefit all around, and we expect this activity to increase going forward, even with market volatility.”
To date, Groundfloor has managed more than $1.7 billion in investment volume.
