Buckhead One Financial Opportunities, LLC, announced that it has completed BFNS 2017-1, a $155.2 million securitization of subordinated debt of community banks. The management series of Buckhead One is the collateral manager for the securitization with assistance from Angel Oak Capital Advisors, LLC, which acts as a service provider.

The senior tranche of the BFNS 2017-1 was given an “Aa2(sf)” rating from Moody’s. The securitization comprises subordinated debt of 25 community banks that individually have less than $10 billion in assets.

“Our efforts will provide these growing institutions with the capital they need to continue their expansion efforts, which in turn helps the communities they serve. In addition, this securitization provides investors with an attractive opportunity to place their money into assets that we believe are undervalued and represent an undiscovered niche of the financial universe,” said Navid Abghari, CEO of Buckhead One.

Buckhead One has extensive experience in this sector. Buckhead One relied heavily on BankSURF, a proprietary model used to assess the credit quality of U.S. banks of all sizes. Debt issuances of smaller banks, which account for approximately 80 percent of all U.S. banks, often go unrated due to the high cost of obtaining a rating, as well as credit agencies’ tendencies to ignore smaller institutions.

“The BankSURF model gives us an advantage when evaluating the debt issuances of smaller banks, which do not have any objective measures of their credit quality due to the lack of interest from ratings agencies. We believe we are the industry leader when it comes to understanding the strengths and weaknesses particular to community banks,” said Johannes Palsson, CIO of Buckhead One.