San Francisco-based private lender Kiavi announced on Thursday that it has secured $300 million in capital after another securitization of its residential transition loans (RTLs).
As the 21st transaction made under the company’s LHOME Mortgage Trust, Kiavi’s total volume of notes offered sits at $5.8 billion since 2019.
Kiavi reported that the offered notes were “oversubscribed by five times its capacity” as institutional investors showed interest. The deal leaves room for reinvestment via a two-year window, allowing investors to reuse principal payoffs to purchase newlyoriginated loans.
This move follows Kiavi’s recent expansion announcement, in which it shared plans to offer its products in 13 new states. And with more markets under its belt, more funding is an important factor in the company’s future growth.
“This transaction adds over $1 billion of funding capacity throughout its lifetime, further strengthening Kiavi’s ability to provide more real estate investors across the nation with the capital they need to grow,” Arvind Mohan, CEO of Kiavi, said in a statement.
“Kiavi’s data advantage and differentiated, technology-led approach drives our consistent track record of performance and risk-adjusted returns. This transaction further expands our funding capacity so we can continue to capitalize on our strong momentum,” he added.
Investors benefit from credit enhancement (CE), which improves the risk profile of a transaction. Morningstar DBRS assigned CE ratings to each note, alongside the investment amount.
Investors in the Class A1 notes that total $246.9 million received a 21.8% CE, which is “provided by the subordinated notes and overcollateralization,” according to Morningstar. The $17.7 million in Class A2 notes included a 16.2% CE. The $20.4 million in Class M1 and $15 million in Class M2 notes had CEs of 9.75% and 5%, respectively.
Kiavi is coming off a record year in 2024, according to its announcement. The company reportedly originated $6.5 billion in loan volume last year, up 46% from 2023. Kiavi also said it boosted its active customer base to more than 5,500, up 30% from 2023. It also launched a new construction financing product for builders. Kiavi has funded more than $23 billion in loans since its inception.
The company closed multiple RTL securitizations last year, including a $350 million transaction in the first quarter. It was followed by a $300 million securitization in the second quarter and a $350 million securitization in the third quarter.
