Merchants Capital Completes $630 Million Securitization of Healthcare CRE Loans

CARMEL, Ind., Oct. 4, 2024 /PRNewswire/ — Leading financial services provider Merchants Capital (Merchants) today announced the securitization of approximately $630 million in healthcare commercial real estate (CRE) bridge loans. The loans were originated by VIUM Capital, Merchants’ joint venture partner, and underwritten and closed on the balance sheet of Merchants’ parent, Merchants Bank, within the past 16 months. The loans are intended to support the properties until they seek permanent financing through U.S. Department of Housing and Urban Development (HUD).

The securitization pool contains 21 loans collateralized by 74 properties across 15 states for a variety of facilities, including skilled nursing, assisted living, memory care and independent living. The loans had a weighted average LTV of 69% and a weighted average debt yield above 15%.

Structured as a credit risk transfer (CRT), Merchants in collaboration with ATLAS SP Partners as Structuring Agent and Sole Bookrunner, partnered with a large investment manager specialized in alternative assets to purchase the junior securities, which totaled 15% of the transaction. As part of its purchase, the investor retained the first loss Risk Retention certificates as a third-party purchaser.

“Merchants is actively positioning its balance sheet to accommodate potential increased volume during the next couple of years,” said Evan Gibson, Executive Vice President of Capital Markets at Merchants Capital. “Merchants has developed a strategic program around loan securitizations, completing four CRTs since 2022, which has helped to provide capital relief, reduce credit risk, and allow Merchants to continue as one of the top multifamily and healthcare bridge lenders in the country.”

To learn more about Merchants Capital and its services, visit www.merchantscapital.com or find Merchants Capital on Facebook, X, LinkedIn and Instagram.

ABOUT MERCHANTS BANCORP
Ranked as a top performing U.S. public bank by S&P Global Market Intelligence, Merchants Bancorp is a diversified bank holding company headquartered in Carmel, Indiana operating multiple segments, including Multi-family Mortgage Banking that offers multi-family housing and healthcare facility financing and servicing; Mortgage Warehousing that offers mortgage warehouse financing; and Banking that offers retail and correspondent residential mortgage banking, agricultural lending, and traditional community banking. Merchants Bancorp, with $18.2 billion in assets and $14.9 billion in deposits as of June 30, 2024, conducts its business primarily through its direct and indirect subsidiaries, Merchants Bank of Indiana, Merchants Capital Corp., Merchants Capital Investments, LLC, Merchants Capital Servicing, LLC, Merchants Asset Management, LLC, and Merchants Mortgage, a division of Merchants Bank of Indiana. For more information and financial data, please visit Merchants’ Investor Relations page at investors.merchantsbancorp.com.

ABOUT MERCHANTS CAPITAL
With more than 30 years of success built on putting people first, Merchants Capital is a proven leader in financing for multifamily housing nationwide. Our licenses with Fannie Mae, Freddie Mac and HUD/FHA, in addition to our bank’s balance sheet products, allow us to offer custom solutions with agility and ease of execution, expanding access to housing in meaningful and impactful ways. Recognized as a top five affordable lender, Merchants Capital pairs our comprehensive debt offerings with in-house tax credit equity to provide a one-stop-shop for developers and owners. To learn more about Merchants Capital, visit www.merchantscapital.com.

FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements which reflect management’s current views with respect to, among other things, future events and financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” “annualized” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about the industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, management cautions that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. A number of important factors could cause actual results to differ materially from those indicated in these forward-looking statements, including the impacts of factors identified in “Risk Factors” or “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K and other periodic filings with the Securities and Exchange Commission. Any forward-looking statements presented herein are made only as of the date of this press release, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

SOURCE Merchants Bancorp

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