CMBS

Unibail-Rodamco-Westfield is offering to exchange any and all of its €1.25 billion ($1.37 billion) notes, which currently pay a coupon of 2.125%, with a new bond paying 7.25% and a cash amount.

Self-storage properties, the makeup of the collateral portfolio, were the only real estate type that generated returns in the black during the global financial crisis in 2008.

Multifamily properties account for the vast majority of the initial pool balance, at 86.2%, DBRS said, which is a plus because multifamily properties typically have lower default rates than other CMBS property types.

Miracle Mile Shops have significant tenant lease rollover, with 53.7% of the mall's net rentable area (NRA) and 66.1% of its base rent scheduled to roll over during the five-year term of the notes.

Brookfield and partners will take approximately $46.3 million in a cashout, while the loan is interest only for the entire loan term.

Small and regional banks have been rocked by deposit outflows following the demise of Silicon Valley Bank, raising concerns that will crimp their ability to provide finance to borrowers.

On an issuer level, the deal has a WA capitalization rate of 6.33%, WA debt service coverage ratio (DSCR) of 1.89x, and a WA loan-to-value ratio of 52.5%.

The five-year notes benefit from overcollateralization equal to 35%, and will use the proceeds to repay a line of credit facility.

Loans located in the 2A market tier accounted for the highest concentration of loans in the pool, at 33.6%.

As of December 2022, improvements contributed about $15.4 million in incremental rental income, plus more than $310 million of additional sales volume.