Leading financial services provider Merchants Capital (Merchants) announced the securitization of approximately $630 million in healthcare commercial real estate (CRE) bridge loans.
The loans were originated by VIUM Capital, Merchants’ joint venture partner, and underwritten and closed on the balance sheet of Merchants Bank, within the past 16 months. The loans are intended to support the properties until they seek permanent financing through U.S. Department of Housing and Urban Development (HUD).
Structured as a credit risk transfer (CRT), Merchants, in collaboration with ATLAS SP Partners as structuring agent and sole bookrunner, partnered with a large investment manager specialized in alternative assets to purchase the junior securities, which totaled 15% of the transaction. As part of its purchase, the investor retained the first loss Risk Retention certificates as a third-party purchaser.
“Merchants is actively positioning its balance sheet to accommodate potential increased volume during the next couple of years,” said Evan Gibson, Executive Vice President of Capital Markets. “Merchants has developed a strategic program around loan securitizations, completing four CRTs since 2022, which has helped to provide capital relief, reduce credit risk, and allow Merchants to continue as one of the top multifamily and healthcare bridge lenders in the country.”
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