Kiavi attracts new investors with latest fix-and-flip mortgage securitization

Kiavi, a San Francisco-based lender for residential real estate investors, announced on Tuesday the closing of a $400 million rated securitization of residential transition loans (RTLs) in an “oversubscribed” transaction. 

The deal marked Kiavi’s 19th securitization, elevating its total issuance to over $5 billion since it launched its securitization program in 2019, including $1.4 billion in 2024 alone. 

The loans bundled in the securitization were mostly investment property loans used for fix-and-flip transactions. Like prior transactions, the deal includes a two-year revolving period during which principal payoffs can be reinvested to purchase new loans. 

Arvind Mohan, CEO of Kiavi, said in a statement that Morningstar DBRS‘s rating enabled the company to attract a “wider set of institutional investors,” including first-time investors.

Ultimately, the securitization was upsized by $100 million and “oversubscribed by multiple times,” the company said. The notes are backed by 659 mortgage loans with a total principal balance of approximately $168 million. 

Nomura Securities International was the primary entity responsible for structuring the deal. Nomura, Barclays Capital, and Performance Trust Capital Partners were joint bookrunners and co-lead managers.

Regarding previous securitizations, the company announced a $350 million bundling of RTLs in February and a $300 million deal in May, followed by a $350 million transaction in July. 

The company said it has funded more than $21 billion in loans.

Recent data from Attom showed that the gross profit margin for home flippers reached 30.2% in first-quarter 2024, the third time in four quarters that the figure had increased.