Annaly Capital Management plans to issue $399.5 million of floating-rate commercial mortgage bonds, according to a presale report published by Kroll Bond Ratings.
The capital structure is comprised of seven tranches that have preliminary ratings ranging from AAA’ to B’, according to the presale report.
The collateral for the transaction consists of 10 first-lien mortgage loans secured by a total of 23 properties. The largest loan in the pool is secured by Optima Chicago (28.8%), a 42-story, 325-unit, high-rise multifamily complex located on a 0.34 acre site in the Chicago, Illinois central business district.
Construction on the project was completed in November 2013 and as of December 2013 the apartment units were 33.2% leased.
The five largest loans also include Ritz Carlton Denver (12.8%), Optima Sonoran (12.2%), Alameda (11.6%) and Atrium One (9.6%), and represent 74.9% of the initial pool balance.
According to the presale, seven of loans, which represent over half of the pool, have initial maturity dates in 2016;two loans representing 21.1% of the pool will mature this year.
Analysts at KBRA note that the structure does not allow for additional collateral to be added to the pool post-closing. This could potentially present new and/or unknown credit risks to certificate holders.