Invitation Homes Inc. (NYSE:INVH) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01.
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Entry into a Material Definitive Agreement.
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The description of the Loan Agreement (as defined below) set forth
under Item 2.03 is hereby incorporated by reference into this Item
1.01.
under Item 2.03 is hereby incorporated by reference into this Item
1.01.
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Item 2.03.
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Creation of a Direct Financial Obligation or an
Obligation Under an Off-Balance Entry Sheet Arrangement of a Registrant. |
Overview
As more fully described below, on April 28, 2017, Invitation Homes
Inc. (the Company) completed its eighth securitization transaction
and its first involving certificates guaranteed by Fannie Mae. In
connection with the transaction, 2017-1 IH Borrower L.P., an
indirect special purpose subsidiary of the Company (the Borrower),
entered into a loan agreement (the Loan Agreement) with Wells Fargo
Bank, National Association, as lender (the Lender), providing for a
ten-year, fixed rate loan comprised of two components with a total
principal balance of $999,999,713 (the Loan). The Loan was funded
with the proceeds from the issuance of pass-through certificates
representing direct or indirect beneficial ownership interests in
the Loan, issued by trust entities formed to effect the
transaction.
Inc. (the Company) completed its eighth securitization transaction
and its first involving certificates guaranteed by Fannie Mae. In
connection with the transaction, 2017-1 IH Borrower L.P., an
indirect special purpose subsidiary of the Company (the Borrower),
entered into a loan agreement (the Loan Agreement) with Wells Fargo
Bank, National Association, as lender (the Lender), providing for a
ten-year, fixed rate loan comprised of two components with a total
principal balance of $999,999,713 (the Loan). The Loan was funded
with the proceeds from the issuance of pass-through certificates
representing direct or indirect beneficial ownership interests in
the Loan, issued by trust entities formed to effect the
transaction.
The Company used the net proceeds from the Loan to repay the
remaining $420 million outstanding under the mortgage loan relating
to its IH1 2014-SFR1 securitization, to fund certain reserves and
to pay transaction fees and expenses incurred with respect to the
transaction. Any remaining net proceeds may be applied to partially
repay the mortgage loan relating to the Company’s IH1 2014-SFR3
securitization.
remaining $420 million outstanding under the mortgage loan relating
to its IH1 2014-SFR1 securitization, to fund certain reserves and
to pay transaction fees and expenses incurred with respect to the
transaction. Any remaining net proceeds may be applied to partially
repay the mortgage loan relating to the Company’s IH1 2014-SFR3
securitization.
The Loan is evidenced by a single componentized promissory note
divided into two separate fixed rate interest bearing components,
designated as Component A and Component B. The closing of the Loan
occurred simultaneously with the consummation of a private offering
of a class of pass-through certificates corresponding to Component
A of the Loan, which benefit from Fannie Maes guaranty of timely
payment of principal and interest, as more fully described below.
The Company retained the class of pass-through certificates
corresponding to Component B of the Loan to comply with risk
retention requirements of Regulation RR (the Risk Retention Rules)
promulgated under the Securities Exchange Act of 1934, as amended
(the Exchange Act).
divided into two separate fixed rate interest bearing components,
designated as Component A and Component B. The closing of the Loan
occurred simultaneously with the consummation of a private offering
of a class of pass-through certificates corresponding to Component
A of the Loan, which benefit from Fannie Maes guaranty of timely
payment of principal and interest, as more fully described below.
The Company retained the class of pass-through certificates
corresponding to Component B of the Loan to comply with risk
retention requirements of Regulation RR (the Risk Retention Rules)
promulgated under the Securities Exchange Act of 1934, as amended
(the Exchange Act).
Loan Agreement
As noted above, on April 28, 2017, the Borrower entered into the
Loan Agreement with the Lender. The Loan is a ten-year, fixed rate
loan, consisting of two fixed rate components each of which bears
interest at 4.2285%. Interest on the Loan is paid monthly.
Loan Agreement with the Lender. The Loan is a ten-year, fixed rate
loan, consisting of two fixed rate components each of which bears
interest at 4.2285%. Interest on the Loan is paid monthly.
For purposes of computing, among other things, interest accrued on
the Loan, the Loan is divided into two components designated as
Component A and Component B. The following table shows the initial
principal amount and the interest rate for each of Component A and
Component B.
the Loan, the Loan is divided into two components designated as
Component A and Component B. The following table shows the initial
principal amount and the interest rate for each of Component A and
Component B.
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Component
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Initial Principal
Amount
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Component
Fixed Rate
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Component A
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$
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944,500,000
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4.2285
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%
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Component B
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55,499,713
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4.2285
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%
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Total / Weighted Average
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$
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999,999,713
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4.2285
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%
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The Loan is secured by first priority mortgages on a portfolio of
7,204 single-family homes operated as rental properties
(collectively, the Properties) owned by the Borrower, as well as a
first priority pledge of the equity interests of the Borrower. The
stated maturity date of the Loan is June 9, 2027. The Loan
Agreement requires that the Borrower comply with various
affirmative and negative covenants that are customary for loans of
this type, including limitations on indebtedness that the Borrower
can incur, limitations on sales and dispositions of the Properties,
required maintenance of specified cash reserves, and various
restrictions on the use of cash generated by the operations of the
Properties while the Loan is outstanding. The Loan Agreement also
includes customary events of default, the occurrence of which would
allow the Lender to accelerate payment of all amounts outstanding.
7,204 single-family homes operated as rental properties
(collectively, the Properties) owned by the Borrower, as well as a
first priority pledge of the equity interests of the Borrower. The
stated maturity date of the Loan is June 9, 2027. The Loan
Agreement requires that the Borrower comply with various
affirmative and negative covenants that are customary for loans of
this type, including limitations on indebtedness that the Borrower
can incur, limitations on sales and dispositions of the Properties,
required maintenance of specified cash reserves, and various
restrictions on the use of cash generated by the operations of the
Properties while the Loan is outstanding. The Loan Agreement also
includes customary events of default, the occurrence of which would
allow the Lender to accelerate payment of all amounts outstanding.
In connection with the Loan, Invitation Homes Operating Partnership
LP (IH OP), the Companys operating partnership, provided the Lender
with a limited recourse guaranty agreement under which, upon the
occurrence of certain
LP (IH OP), the Companys operating partnership, provided the Lender
with a limited recourse guaranty agreement under which, upon the
occurrence of certain
specified events including customary bad-boy acts, breaches of
specified representations, warranties and covenants and specified
bankruptcy or insolvency proceedings, it would indemnify the lender
against losses it incurs or, under certain circumstances, guaranty
the payment in full of the Loan.
specified representations, warranties and covenants and specified
bankruptcy or insolvency proceedings, it would indemnify the lender
against losses it incurs or, under certain circumstances, guaranty
the payment in full of the Loan.
This description of the Loan Agreement is not complete and is
qualified in its entirety by reference to the Loan Agreement, filed
as Exhibit 10.1 to this Current Report on Form 8-K, which is
incorporated herein by reference.
qualified in its entirety by reference to the Loan Agreement, filed
as Exhibit 10.1 to this Current Report on Form 8-K, which is
incorporated herein by reference.
Securitization Transaction
Concurrent with the execution of the Loan Agreement, the Lender
sold the Loan to IH Asset Receiving Limited Partnership (the
Depositor), an indirect subsidiary of the Company, which, in turn,
transferred the loan to a trust in exchange for (i) $944,500,000
principal amount of Invitation Homes 2017-SFR1 Single-Family Rental
Pass-Through Certificates, Class A (the IH Class A Certificates),
(ii) $55,499,713 principal amount of Invitation Homes 2017-SFR1
Single-Family Rental Pass-Through Certificates, Class B (the Class
B Certificates) and (iii) Invitation Homes 2017-SFR1 Single-Family
Rental Pass-Through Certificates, Class R (the Class R
Certificates). The IH Class A Certificates, the Class B
Certificates and the Class R Certificates represent beneficial
ownership interests in the Loan. The Depositor then transferred the
IH Class A Certificates, which carry Fannie Maes guaranty of timely
payment of principal and interest, to Fannie Mae in exchange for a
like principal amount of Fannie Mae Grantor Trust 2017-T1
Guaranteed Grantor Trust Pass-Through Certificates, Class A (the FM
Class A Certificates), which were issued by a trust entity
established by Fannie Mae and are backed by the IH Class A
Certificates.
sold the Loan to IH Asset Receiving Limited Partnership (the
Depositor), an indirect subsidiary of the Company, which, in turn,
transferred the loan to a trust in exchange for (i) $944,500,000
principal amount of Invitation Homes 2017-SFR1 Single-Family Rental
Pass-Through Certificates, Class A (the IH Class A Certificates),
(ii) $55,499,713 principal amount of Invitation Homes 2017-SFR1
Single-Family Rental Pass-Through Certificates, Class B (the Class
B Certificates) and (iii) Invitation Homes 2017-SFR1 Single-Family
Rental Pass-Through Certificates, Class R (the Class R
Certificates). The IH Class A Certificates, the Class B
Certificates and the Class R Certificates represent beneficial
ownership interests in the Loan. The Depositor then transferred the
IH Class A Certificates, which carry Fannie Maes guaranty of timely
payment of principal and interest, to Fannie Mae in exchange for a
like principal amount of Fannie Mae Grantor Trust 2017-T1
Guaranteed Grantor Trust Pass-Through Certificates, Class A (the FM
Class A Certificates), which were issued by a trust entity
established by Fannie Mae and are backed by the IH Class A
Certificates.
The Depositor sold the FM Class A Certificates and the Class R
Certificates, acquired by the Depositor in the manner described
above, to investors in a private offering. The FM Class A
Certificates are exempt from registration under the Securities Act
of 1933, as amended (the Securities Act), and are exempted
securities under the Exchange Act. The Class R Certificates were
sold to qualified institutional buyers and non-U.S. persons through
the placement agents retained for the transaction to the exemptions
from registration provided by Rule 144A and Regulation S,
respectively, under the Securities Act. To satisfy the applicable
Risk Retention Rules, IH OP purchased the Class B Certificates in
order to retain an eligible horizontal residual interest (as
defined in the Risk Retention Rules) in an amount equal to at least
5% of the fair value of the offered and retained securities. The
Depositor used the proceeds from the sale of the FM Class A
Certificates, the Class B Certificates and the Class R Certificates
to purchase the Loan from the Lender, as described above.
Certificates, acquired by the Depositor in the manner described
above, to investors in a private offering. The FM Class A
Certificates are exempt from registration under the Securities Act
of 1933, as amended (the Securities Act), and are exempted
securities under the Exchange Act. The Class R Certificates were
sold to qualified institutional buyers and non-U.S. persons through
the placement agents retained for the transaction to the exemptions
from registration provided by Rule 144A and Regulation S,
respectively, under the Securities Act. To satisfy the applicable
Risk Retention Rules, IH OP purchased the Class B Certificates in
order to retain an eligible horizontal residual interest (as
defined in the Risk Retention Rules) in an amount equal to at least
5% of the fair value of the offered and retained securities. The
Depositor used the proceeds from the sale of the FM Class A
Certificates, the Class B Certificates and the Class R Certificates
to purchase the Loan from the Lender, as described above.
Each class of pass-through certificates (other than Class R)
accrues interest at a fixed rate. The table below shows the initial
balance and pass-through rate for the FM Class A Certificates and
the Class B Certificates. The Class R Certificates do not have a
certificate balance or pass-through rate.
accrues interest at a fixed rate. The table below shows the initial
balance and pass-through rate for the FM Class A Certificates and
the Class B Certificates. The Class R Certificates do not have a
certificate balance or pass-through rate.
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Offered Certificate
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Initial Balance
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Initial Pass-Through Rate
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FM Class A
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$
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944,500,000
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2.898
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%
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Class B
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55,499,713
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4.168
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%
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Class R
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N/A
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N/A
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No.>>>>Description_________________________________________________________________________________________
No.>>>>Description_________________________________________________________________________________________
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10.1
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Loan Agreement, dated as of April 28, 2017, between
2017-1 IH Borrower L.P., as Borrower and Wells Fargo Bank, National Association, as Lender. |
About Invitation Homes Inc. (NYSE:INVH)
Invitation Homes Inc. is a real estate investment trust. The Company owns and operates single-family homes for lease in the United States. The Company’s segment relates to acquiring, renovating, leasing and operating single-family homes as rental properties, including single-family homes in planned unit developments. As of September 30, 2016, the Company’s averaged approximately 1,850 square feet with three bedrooms and two bathrooms. As of September 30, 2016, the Company’s portfolio included 48,431 homes. As of September 30, 2016, the Company’s homes were located in Southern California, Northern California, Seattle, Phoenix and Las Vegas in Western United States; South Florida, Tampa, Orlando and Jacksonville in Florida; Atlanta and Charlotte in Southeast United States, and Chicago and Minneapolis in Midwest United States. As of September 30, 2016, the Company had 73 homes in escrow that we expected to acquire, subject to customary closing conditions. Invitation Homes Inc. (NYSE:INVH) Recent Trading Information
Invitation Homes Inc. (NYSE:INVH) closed its last trading session up +0.13 at 21.68 with 704,630 shares trading hands.