VIUM, Merchants Complete $1.1B Private Securitization of Seniors Housing Assets

by Jeff Shaw

COLUMBUS, Ohio — Seniors housing and healthcare lender VIUM Capital and its joint-venture partner Merchants Bancorp, along with ATLAS SP Partners as structuring agent and sole bookrunner, have completed a securitization referencing over $1.1 billion of first-lien, floating-rate skilled nursing and seniors housing bridge loans.

In this transaction Merchants Bank issued and sold $158 million aggregate principal balance of senior credit linked notes representing approximately 14 percent of the reference pool. Merchants Bank’s wholly owned subsidiary, Merchants Capital Corp., will continue to service the loans.

Through this transaction it is expected that Merchants Bank will reduce its risk-weighted assets and receive capital relief under current risk-based capital rules.

“This securitization is a novel capital markets solution that further enables us to continue to lean into the healthcare and seniors housing real estate market as a reliable, leading lender,” says Steve Kennedy, VIUM co-founder and executive managing director. “It’s the first credit-risk transfer securitization of its kind in our industry, exemplifying the capital creativity that is at the foundation of our company.”

VIUM Capital worked closely with Merchants’ capital markets team and ATLAS SP Partners to effectuate the deal, which included multiple institutional buyers. The transaction does not affect the interest rate or terms of the bridge loans.

“Our healthcare bridge loan portfolio consists of high quality assets producing solid debt service coverage as the loans season for permanent financing through HUD or the GSEs,” says Kass Matt, VIUM co-founder and executive managing director. “This is a repeatable structure that will be another tool to ensure we continue to provide reliable, cost-effective, term-favorable capital to our healthcare and seniors housing clients.”

VIUM is based out of Columbus, and has regional offices in Austin, Texas and Boca Raton, Florida.

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