Kiavi closed a $400 million rated securitization of residential transition loans (RTLs), its 20th transaction under its LHOME shelf and fifth of 2024, as well as its second rated securitization.  

The lender to residential real estate investors said that due to significant interest, the transaction was upsized and oversubscribed. The offered notes are in four classes, A1, A2, M1, and M2, all of which were sold. Consistent with prior transactions, the deal includes a two-year revolving period, during which principal payoffs can be reinvested to purchase additional newly originated loans. 

“With the advent of rated securitizations, we’re seeing demand from a wider set of institutional investors, including a number of first-time investors,” said Arvind Mohan, CEO of Kiavi. 

Through the third quarter, Kiavi originated nearly 15,000 loans totaling $4.6 billion, a 44.5% increase over the same period last year, the firm noted. The company recently announced its first rated securitization of RTLs and expanded its product suite by launching a new construction financing product. 

In total, Kiavi has issued more than $5.5 billion in offered notes since it began its securitization program in 2019 and about $1.9 billion in 2024 alone. 

Securitizations of RTLs, sometimes known as “fix-and-flip” loans or residential bridge loans, have increased in recent years, with several commercial real estate finance firms announcing new deals. 

Kiavi closed a $400 million rated RTL securitization in August. Sherman Oaks, CA-based Genesis Finance, a Rithm Capital company, closed a $450 million rated securitization backed by RTLs, last month. Toorak Capital Partners, Inc. closed the first-ever rated RTL securitization at $250 million in February 2024.  

Morningstar DBRS provided a credit rating on the deal. Nomura Securities International, Inc. was the sole structuring agent. Nomura, Barclays Capital, Inc. and Performance Trust Capital Partners, LLC were joint bookrunners and co-lead managers on the transaction.