VIUM Capital and its joint venture partner Merchants Bancorp, the parent company of Merchants Bank of Indiana, completed a synthetic securitization referencing over $1.1 billion of first-lien, floating-rate bridge loans on skilled nursing and seniors housing properties. ATLAS SP Partners acted as structuring agent and sole bookrunner on the transaction. As part of the deal, Merchants Bank issued and sold $158 million aggregate principal balance of senior credit linked notes representing approximately 14% of the reference pool. The bank’s wholly owned subsidiary, Merchants Capital Corp., will continue to service the loans. The transaction involved multiple institutional buyers and did not affect the interest rate or terms of the bridge loans.
Through the deal, which is the first credit-risk transfer securitization in the senior care industry’s history, Merchants Bank expects to reduce its risk-weighted assets and receive capital relief under current risk-based capital rules. For VIUM, the securitization provides some stability and security as the bridge loans in the pool continue to season for permanent financing through HUD or the GSEs. The securitization included 37 loans with 104 separate properties, split between 66 skilled nursing facilities, 26 seniors housing communities and 12 properties with both types.
