Investors warn on ratings race for new rental loan deals

By Matthew Scully
16 Apr 2014

Morningstar Credit Ratings is forging ahead to rate conduit-style securitizations of home rental loans, an offshoot of the single-borrower deals from Blackstone Group and Colony Capital. Credit graders’ eagerness to rate an inaugural transaction, however, has some fixed income investors openly lamenting the post-crisis rating process, which they believe remains flawed.

Morningstar will very soon release a commentary that would draw from valuations used to rate Blackstone’s single-borrower rental deal from Invitation Homes, according to the Brian Grow, managing director of residential mortgage-backed securities ratings.

“It’s possible we could rate a deal by the end of the year,” ...

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