Residential equity investment asset class further matures as Point completes third securitization
PALO ALTO, Calif., May 30, 2024 (GLOBE NEWSWIRE) — Point, a leading home equity investment platform increasing the value and accessibility of homeownership, and Atalaya Capital Management (“Atalaya”), Point’s long-term lending partner, today announced the completion of a rated securitization of Point’s home equity investment (“HEI”) assets and the issuance of approximately $141 million of rated asset-backed securities (the “Transaction”). The transaction marks Point’s second rated securitization and third overall.
The transaction closed on May 15, 2024. The issuer, Point Securitization Trust 2024-1, issued approximately $98 million of senior Class A-1 securities rated A(sf), approximately $29 million of Class A-2 mezzanine securities rated BBB(low)(sf), and approximately $14 million of subordinated securities rated BB(sf), all rated by Morningstar DBRS. The transaction attracted significant interest from both new and repeat institutional investors and was significantly oversubscribed. This is also the first HEI securitization in which BB(sf) rated securities were sold. Point is the originator for all of the HEIs in the securitization and will continue to service the assets.
“The higher education asset class has developed at incredible speed over the past few months,” said Eddie Lim, co-founder and CEO of Point. “The investment community has seen higher education outcomes exceed expectations and has embraced the product at scale. The overwhelming response to our latest securitization signals that even more great things are in store for Point, the homeowners we serve, and the higher education category as a whole.”
“Atalaya and Point have been working together since 2018 and we are pleased to continue our partnership with the Point team,” said Daniel Rosato, managing director at Atalaya. “Point’s track record of successful securitizations is a testament to the investments they have made in their technology and operations. These capital markets successes mean that more homeowners will benefit from the increased liquidity of this product at a time when traditional mortgage options remain prohibitively expensive.”
Rated securitizations in the HEI space have increased significantly since Morningstar DBRS released its HEI rating methodology in July 2023. The availability of ratings has broadened the base of investors evaluating the HEI asset class to include insurance companies and asset managers seeking new investment-grade securities. By providing investors with liquidity and access to HEIs, this securitization marks a major milestone toward more programmatic issuance, ultimately enabling Point to help more homeowners improve their financial situations.
Home equity investing is an innovative approach to home equity financing for homeowners. U.S. homeowners have more than $20 trillion in available home equity, but only about half of those who want to tap into it have access to it. Rising mortgage rates have made cash-out refinancing less attractive, and traditional lenders have tightened credit requirements, making it increasingly difficult for many homeowners to qualify for a home equity line of credit (HELOC). HEIs fill this gap, providing an important financial avenue for homeowners who have accumulated substantial home equity but whose needs are not met by traditional financial products. Homeowners appreciate the lack of monthly payments and the risk-sharing structure that characterizes HEIs.
“The economic environment is becoming increasingly tough for many homeowners. Mortgage interest rates have remained higher for longer than expected, and homeowners are feeling even more financial strain as inflation pushes the cost of daily living to record highs. The silver lining is home equity, especially leverageable home equity, which continues to increase. This economic environment proves the need for asset-based lending options now more than ever. Higher education institutions can offer a great solution for homeowners who need additional financial assistance but don’t want to increase their monthly expenses or give up their low-interest mortgages,” added Lim.
Nomura Securities International Co., Ltd. (“Nomura”) acted as sole structure agent for the offering. Nomura, Barclays Capital Co., Ltd. and Performance Trust Capital Partners LLC acted as joint book-running managers for the transaction, and East West Markets LLC and Cantor Fitzgerald & Co. acted as joint managers for the transaction.
About points
Point is the leading home equity platform that increases the value and accessibility of homeownership. Point’s flagship product, Home Equity Investment (HEI), helps homeowners leverage their equity to eliminate debt, overcome financial difficulties, and diversify their wealth without increasing monthly expenses. Point has worked with over 10,000 homeowners to create $1 billion in home equity. Point’s HEI gives investors access to a previously untapped asset class: owner-occupied residential real estate. Founded in 2015 by Eddie Lim, Eoin Matthews, and Alex Rampell, Point is backed by top investors including Westcap, Andreessen Horowitz, Ribbit Capital, Greylock Partners, Bloomberg Beta, Atalaya Capital Management, Alpaca VC, and Prudential. The company is headquartered in Palo Alto, California. For more information, please visit www.point.com.
About Atalaya
Atalaya Capital Management is a privately held, SEC registered alternative investment advisory firm. Atalaya is primarily focused on private credit and special opportunity investments across three major asset classes: financial assets, real estate and corporates. Founded in 2006, Atalaya is headquartered in New York City and has approximately $10 billion in assets under management and has invested over $17 billion since inception. For more information, please visit https://www.atalayacap.com.
contact address:
point
Amanda Woolley – Communications Lead
Phone: 360.319.1738
Email: media@point.com
Atalaya
Rebecca Chia – Business Development and Investor Relations
Phone: 212.201.1929
Email: Rchia@atalayacap.com
CONTACT: Amanda Woolley Point 3603191738 awoolley@point.com
