Rental-Home-Backed Bond by Blackstone: How it works from Paul Gozzo

I (Paul Gozzo) thought this was a pretty good graphic illustration of how the Blackstone's new bond backed by rents on single family homes actually works.

Blackstone’s Big Bet on Rental Homes

The Blackstone Group LP, the world's largest private equity firm, became the largest owner of rental homes in the U.S. , acquiring 41,000 homes in the past two years. In October, Blackstone offered the first-ever "rental-home-backed" security on Wall Street. The bond is backed by just a fraction — 3,207 — of the rental properties owned by Blackstone. Monthly rent checks from the properties will be used to service the $479.1 million security.

PUBLISHED DEC. 20, 2013

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Sources: Moody’s Investor Service, Deutsche Bank Securities, Bloomberg research

GRAPHIC: DAVE MERRILL / BLOOMBERG VISUAL DATA