Insurance firm Assurant Inc. is bringing a diverse mix of low-leverage commercial mortgages to it’s first-ever $259.7 million securitization.
Assurant Commercial Mortgage Trust 2016-1 is backed by loans originated, sponsored or sold by Assurant and its subsidiaries, with a strong mix of retail, office and multifamily properties. The loans are generally low-leverage, with an average seasoning of 45 months and loan-to-value ratios of 81.2%; however, many of the loans were not originated with the intention of securitization, and are missing common CMBS features such escrows and reserves.
Fitch has issued early ‘AAA’ structured finance ratings on both the super-senior tranches of notes totaling $181.8 million, and subordinate Class A-S notes totaling $38.9 million. The senior Class A notes have a 30% credit enhancement, while the A-S notes have 15%.
The remaining $38.9 million are dispersed among six unrated classes of B through G notes.
Fitch notes the diverse portfolio of 79 loans has lower concentrations in the number and size of the commercial mortgages, with the 10 largest loans comprising only 29.3% of the pool compared to a 2016 year-to-date average of 54.8% on other rated CMBS packages.
Fitch raised concerns about volatility, however. The variance between the issuer’s cash flow analysis and that of Fitch is 14.55%, based on Fitch’s more cautious views on vacancy rates, management fees and leasing costs of the underlying properties. Retail loans make up 39.8% of the pool, with industrial (26.7%) and office properties (18.1%) rounding out the top three segments in the pool.
The pool, however does not contain hotels, which Fitch considers a more volatile sector that usually comprises up to 17% of other rated CMBS deals.
The securitization has been placed through Wells Fargo.