Wells Fargo, JP Morgan and Bank of America priced the $600 million single-asset commercial mortgage-backed securitization, Queens Center Mortgage Trust 2013-QC.
The deal, which is backed by backed by the Queens Center in New York City, was rated by Fitch Ratings. According to one industry source, the $400 million of class A notes , rated ‘AAA’ priced at +85 basis points. The $77 million of class B notes rated ‘AA-’ priced at 95 basis points; $52 million of class C notes rated ‘A-’ priced at 125 basis points; and $60 million of class D notes rated ‘BBB-’ priced at 180 basis points.
By contrast, the $300 million Goldman Sachs CMBS deal backed by Bridgewater Commons on Dec. 13, priced its triple-A rated class A notes at 100 basis points; the double-A minus, B notes priced at 130 basis points; the single-A minus class C notes priced at 170 basis points; and the triple-B rated, class D notes priced at 215 basis points.
Barclays Bank and UBS Real Estate Securities’ Nov.1, 2012 $835 million, single asset CMBS deal backed by the Fashion Show Mall, called BB-UBS Trust 2012-SHOW priced its triple- A notes at 115 basis points; the double-A notes at 160 basis points, single-A notes at 195 basis points and the triple-B minus notes at 285 basis points.
The increase in demand for lower-rated tranches of single-asset deals, coupled with the very limited supply, continues to push spreads inside those of similarly-rated tranches of conduits.
On Wednesday, Morgan Stanley and Bank of America priced the lower rated tranches for its $1.23 billion commercial mortgage-backed securitization conduit, series 2013-C7 up to 75 basis point wider than the Queens Center deal. The deal’s $85.3 million of class B, double-A rated notes priced at 155 basis points; and the $52.2 million of class C, single-A rated notes priced at 200 basis points.
“The pricing on single assets can be a lot flatter that the conduits,” said on CMBS analyst. “It really depends upon the assets however. Where you have stabilized trophy properties, you do a curve that is considerably flatter. This is true of performing legacy asset deals as well.”