SR Alternative Credit (“SRAC”), formerly Old Hill Partners, announced a $4 million investment in a micro-securitization of tenant lease contracts originated by a leading proptech company dedicated to improving the residential lease market for both landlords and tenants. The company enters into bulk master lease contracts with owners of rental properties and subleases the underlying units to tenants through its AI-powered app. The securitization includes several structural enhancements and protections, including a back-up administrator, strong tenant credit profiles, a landlord payment reserve and material subordination. This is the first such securitization completed by the company and SRAC was the sole investor.

“Over the course of several months, we worked with the company to properly structure the securitization to address the unique risks present in their business model. Our broad knowledge of the specialty finance sector and our historical willingness to engage with novel asset classes proved to be an invaluable contribution to the overall effort,” said Peter Faigl, Chief Investment Officer of SRAC.

SRAC joined the Spouting Rock Asset Management platform in January 2022 and provides asset-based lending solutions for borrowers seeking $10 to $50 million in financing. The firm structures senior secured debt in the form of term, drawdown and revolving-to-term facilities of up to four years and loan-to-value ratios in the range of 35% to 85%. Collateral types include pools of loans and leases (specialty finance), receivables, inventory, machinery and equipment.