Home equity investment asset class matures further as Point completes its third securitization
Palo Alto, California, May 30, 2024 (GLOBE NEWSWIRE) — Point, the leading home equity investment platform making homeownership more valuable and accessible, and Atalaya Capital Management (“Atalaya”), Point’s long term financing partner, announced today that they have completed a rated securitization of Point’s Home Equity Investment (“HEI”) assets, issuing approximately $141 million of rated asset-backed securities (the “Transaction”). The Transaction is 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 $14 million of subordinate securities rated BB (sf), all rated by Morningstar DBRS. The Transaction drew significant interest from both new and repeat institutional investors, resulting in the Transaction being meaningfully oversubscribed. In addition, this is the first HEI securitization where securities rated BB (sf) were sold. Point was the originator of all the HEIs in the securitization and will continue to service the assets.
“The past few months have seen incredible momentum developing in the HEI asset class,” said Eddie Lim, co-founder and CEO of Point. “The investment community is seeing the results from HEIs exceed expectations and are embracing the product at scale. The overwhelming response to our latest securitization signals that there are more great things in store for Point, the homeowners we serve, and the HEI category as a whole.”
“Atalaya and Point have been working together since 2018, and we are excited 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 that Point has made in its technology and operations. All of this capital markets success means more homeowners stand to benefit from increased liquidity in this product at a time when traditional home financing options remain very expensive.”
Rated securitizations in the HEI space have grown substantially since Morningstar DBRS published its ratings methodology for HEIs in July 2023. The availability of ratings has expanded the base of investors evaluating the HEI asset class to include insurance companies and money managers seeking new investment-grade securities. By providing liquidity and access to HEIs for investors, this securitization is a major milestone towards more programmatic issuance, ultimately making it possible for Point to help more homeowners improve their financial health.
Home equity investments represent an innovative approach to home equity financing for homeowners. Despite U.S. homeowners having more than $20 trillion in tappable home equity, only roughly half of them who try to access it are able to. Mortgage rates have made cash-out refinances less attractive, and traditional lenders have tightened their credit requirements, making it increasingly difficult for many homeowners to qualify for home equity lines of credit (“HELOCs”). HEIs close the gap, providing a vital financial avenue for homeowners who have built substantial home equity but whose needs are unmet by traditional financial products. Homeowners value the absence of monthly payments and the risk-sharing structure that defines HEIs.
“It is an increasingly tough financial environment for many homeowners. Mortgage rates have stayed higher longer than expected, and homeowners are experiencing more strain on their finances as inflation pushes everyday living expenses to new highs. The bright spot is home equity, and tappable home equity, especially, has continued to grow. This economic environment has proved more than ever the need for equity-based financing options. HEIs can provide a great solution for homeowners who need extra financial support but don’t want to add to their monthly expenses or give up their lower-rate mortgage,” added Lim.
Nomura Securities International Inc. (“Nomura”) was the sole-structuring agent of the issuance. Nomura, Barclays Capital Inc., and Performance Trust Capital Partners, LLC were joint bookrunners on the Transaction, and East West Markets, LLC and Cantor Fitzgerald & Co. were co-managers on the Transaction.
About Point
Point is the leading home equity platform making homeownership more valuable and accessible. Point’s flagship product, the Home Equity Investment (“HEI”), empowers homeowners to unlock their equity to eliminate debt, get through periods of financial hardship, and diversify their wealth – without adding to their monthly expenses. Point has worked with more than 10,000 homeowners, unlocking $1 billion in home equity. Point’s HEI enables investors to access 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, CA. For more information, please visit www.point.com.
About Atalaya
Atalaya Capital Management is a privately held, SEC-registered, alternative investment advisory firm. Atalaya primarily focuses on making private credit and special opportunities investments in three principal asset classes – financial assets, real estate, and corporate. Founded in 2006, Atalaya is headquartered in New York City, 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.
CONTACTS:
Point
Amanda Woolley – Communications Lead
Phone: 360.319.1738
Email: media@point.com
Atalaya
Rebecca Chia – Business Development and Investor Relations Lead
Phone; 212.201.1929
Email: Rchia@atalayacap.com
CONTACT: Amanda Woolley Point 3603191738 awoolley@point.com
