Two major Wall Street firms are in detailed discussions to create and sell the world's first bond backed by home-rental payments, people familiar with the matter say.

Blackstone Group LP is in negotiations to bundle monthly rental payments on about 1,500 to 1,700 of its homes. The private-equity giant is among the firms that have spent billions buying homes out of foreclosure, an investment strategy that has helped to bolster demand and strengthen the U.S. housing market.

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