Wells Fargo plans to issue a $1.4 billion conduit transaction called Wells Fargo Commercial Mortgage Trust 2013-LC12, according to a presale report from Kroll Bond Ratings Agency.
The deal is backed by 83 fixed-rate commercial mortgage loans secured by 150 properties. All of the loans were orginated by three sellers: Ladder Capital Finance (39.3%), The Royal Bank of Scotland (33.95), and Wells Fargo Bank, NA (26.8%).
KBRA assigned prelimary ratings to the notes. There are nine 'AAA' rated tranches totalling $1.103 billion; an $88.072 million 'AA-' rated tranche; two 'A-' rated tranches totalling $56.367 million (one is an exchangable PEX class); a $66.936 million 'BBB-' rated tranche; a $28.183 million 'BB' rated tranche; a $14.092 million 'B' rated tranche; and two unrated tranches equal to $52.844 million.
The collateral pool benefits from low geographical and property type concentrations. The properties are located in 28 different states, and with the exception of Florida (12.1%), no state represents more than 10.0% of the pool balance. The pool has exposure to eight property types. Retail (39.8%) and office (21.8%) are the only property types representing more than 15.0% of the pool, according to the report.
However, four (9.1%) have existing mezzanine debt in place, one loan (0.9%) has existing unsecured subordinate debt in place, and fifteen loans (45.8%) permit the incurrence of future mezzanine financing, subject to the satisfaction of certain conditions set forth in the related loan documents.
KBRA also noted that the pool has slightly less balance distribution than any of the CMBS conduits it rated during the first half of 2013. The top 10 loans by balance represent 56.2% of the pool balance.