Blackstone Group LP, the largest U.S. landlord of single-family homes, is working with Deutsche Bank AG to sell $1 billion of securities tied to its properties, about twice the size of previous offerings, according to a person with knowledge of the plans.
Deutsche Bank AG designed a derivative for Banca Monte dei Paschi di Siena SpA at the height of the financial crisis that obscured losses at the world’s oldest lender before it sought a taxpayer bailout.
Investors in Blackstone Group LP’s debut sale of bonds backed by U.S. rental homes are agreeing to accept more risk than in traditional mortgage deals by at least two measures -- along with an unproven business.
Steve Schwarzman’s Blackstone Group LP has spent $7.5 billion acquiring 40,000 houses in the past two years to create the largest single-family rental business in the U.S. The private-equity firm is now planning to sell bonds backed by lease payments, the latest step in turning a small business into a mature industry.