DALLAS, June 10, 2019 /PRNewswire/ -- Invitation Homes Inc. (NYSE: INVH) ("Invitation Homes" or the "Company") today announced that on June 7, 2019 the Company completed a twelve-year secured term loan with U.K.-based life insurance company Rothesay Life Plc. The loan was originated by Rothesay Life Group company Rothesay Asset Management US LLC, and the principal balance of the loan is $403 million. Total cost of funds for the loan is fixed at 3.59% for the first eleven years, and then floats at LIBOR + 147 bps in the twelfth year, subject to certain adjustments outlined in the Loan Agreement.
"Invitation Homes has a history of innovation, and we are excited to have partnered with Rothesay Life to pioneer a new financing channel for the single-family rental sector," said Ernie Freedman, Invitation Homes' chief financial officer. "We are pleased that more and more capital providers continue to recognize the uniquely attractive nature of our industry as it evolves. In addition, this financing extends the maturity profile of Invitation Homes' balance sheet at a favorable cost of funds as we continue to progress toward our goal of achieving a corporate investment grade rating."
Structural features of the loan provide for more flexibility than in most of the Company's other financings to date. Invitation Homes has the right to substitute properties representing up to 20% of the collateral pool annually, and up to 100% of the collateral pool over the life of the loan, subject to certain requirements and limitations outlined in the loan agreement. In addition, four times after the first anniversary of the closing of the loan, and subject to certain requirements and limitations outlined in the loan agreement, Invitation Homes has the right to execute a special release of collateral representing up to 15% of the then-outstanding principal balance of the loan in order to bring the loan-to-value ratio back in line with the loan-to-value ratio as of the closing date.
Invitation Homes used the proceeds from the loan and cash on hand to repay $418 million of outstanding secured debt, including the entirety of its outstanding 2021 maturities, and to fund certain reserves and pay transaction fees and expenses incurred with respect to the loan. The Company now has no debt maturing prior to 2022, with the exception of $230 million of convertible notes maturing in 2019 for which it has announced its intent to settle in common shares. In addition, the refinancing transaction is expected to result in annualized cash interest savings of approximately $3.6 million.
About Invitation Homes:
Invitation Homes is a leading owner and operator of single-family homes for lease, offering residents high-quality homes across America. With more than 80,000 homes for lease in 17 markets across the country, Invitation Homes is meeting changing lifestyle demands by providing residents access to updated homes with features they value, such as close proximity to jobs and access to good schools. The company's mission, "Together with you, we make a house a home," reflects its commitment to high-touch service that continuously enhances residents' living experiences and provides homes where individuals and families can thrive.
About Rothesay Life:
Rothesay Life was established in 2007 and has become one of the leading providers of regulated insurance solutions in the U.K. market for pensions de-risking. This strong growth has been achieved through the steady accumulation of pension scheme clients, significant strategic acquisitions and the reinsurance of annuity portfolios. Rothesay Life has assets under management of over £36bn and insures the pensions of over 770,000 individuals. Rothesay Asset Management US LLC is a Rothesay Life Group company responsible for originating assets for Rothesay Life in the United States. Rothesay Life has three substantial institutional shareholders, Blackstone, GIC and Massachusetts Mutual Life Insurance Company, who provide the company with long term support for its growth and development. Rothesay Life is authorised by the UK Prudential Regulation Authority and regulated by the UK Financial Conduct Authority and the UK Prudential Regulation Authority. Further information is available at www.rothesaylife.com.
Invitation Homes Investor Relations Contact:
Greg Van Winkle
Phone: 844.456.INVH (4684)
Invitation Homes Media Relations Contact:
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which include, but are not limited to, the performance of the Company's business, its financial results, its liquidity and capital resources, and other non-historical statements. In some cases, you can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words. Such forward-looking statements are subject to various risks and uncertainties, including, among others, risks associated with achieving expected revenue synergies or cost savings from the merger, risks inherent to the single-family rental industry sector and the Company's business model, macroeconomic factors beyond the Company's control, competition in identifying and acquiring the Company's properties, competition in the leasing market for quality residents, increasing property taxes, homeowners' association fees and insurance costs, the Company's dependence on third parties for key services, risks related to evaluation of properties, poor resident selection and defaults and non-renewals by the Company's residents, performance of the Company's information technology systems, and risks related to the Company's indebtedness. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. Additional factors that could cause the Company's results to differ materially from those described in the forward-looking statements can be found under the section entitled "Part I. Item 1A. Risk Factors," of the Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the Securities and Exchange Commission (the "SEC"), as such factors may be updated from time to time in the Company's periodic filings with the SEC, which are accessible on the SEC's website at http:// www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in the Company's filings with the SEC. The forward-looking statements speak only as of the date of this press release, and we expressly disclaim any obligation or undertaking to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except to the extent otherwise required by law.
SOURCE Invitation Homes