Front Yard Residential Corp. subsidiary HOME SFR Borrower LLC, or HOME Borrower, secured an approximately $505.0 million loan, secured by equity interests and mortgages on 4,262 single-family residential rental properties financed under the loan.
The five-year loan bears an interest rate at one-month London interbank offered rate plus a fixed spread of 1.80%.
HOME Borrower used a portion of the proceeds of the new loan to pay down and terminate the previous financing on the rental properties under a loan agreement of $489.3 million, a maximum term of five years and annual interest at one-month Libor plus a weighted average spread of 3.285%.
Morgan Stanley Mortgage Capital Holdings LLC serves as the administrative agent for the loan, and Wells Fargo Bank NA acted as paying agent and calculation agent.
In addition, HOME Borrower altered its property management services agreement with Main Street Renewal LLC, the property manager under the previous loan agreement. Under the revised agreement, Front Yard's internal property management platform will receive the property management rights of the rental assets, with the transition expected to be complete by March 30, 2019.