Thirty-five loans on 24 properties will serve as collateral for a $705.2 million commercial mortgage-backed securities (CMBS) conduit deal, the latest from the BANK platform.
The transaction, BANK 2023-BNK45, is coming to market thanks to 19 securitization sponsors and loan sellers, according to pre-sale reports from Kroll Bond Rating Agency and Moody's Investors Service. The list of sponsors includes Wells Fargo and Morgan Stanley Mortgage Capital Holdings, which have contributed loans on a range of commercial property types, as well as Bank of America National Association (BANA), listed as the retaining sponsor, according to KBRA.
Retail (36.1%) and office (28.1%) accounted for the largest percentages of loans by far, according to a breakdown from KBRA. Other property types include lodging (13.9%), industrial (11.2%) and a mix of properties categorized as other (10.6%). In terms of the types of loans in the pool, full-term interest-only accounted for 63.0% of the pool, and amortizing balloon loans another 26.9%. Partial term interest-only loans accounted for 10.0% of loans.
The loan count is the lowest across the 311 conduit CMBS deals that KBRA has rated since 2012. In that timeframe the loan count ranged from 20 to 133 and averaged 57, the rating agency said.
Moody's noted several credit strengths of the BANK 2023-BNK45 notes, beginning with location. Loans representing 23.3% of the pool are secured by real estate located in the large major metropolitan statistical areas, including Boston (12.0%), Chicago (10.7%) and New York (0.6%). Properties in those areas normally exhibit more cash flow and capitalization rate stability over time, compared with properties in smaller or tertiary markets.
Another credit plus is that five of the loans have investment-grade structured credit assessments, Moody are said. Those loans financed such properties as 100 & 150 South Wacker Drive, class A office buildings in Chicago. Another is the CX-250 Water Street loan, which represents about 7.8% of the pool balance and finances an approximately 479,000-square-foot, class A, mixed-use building with life science laboratory and office tenants.
Moody's expects to assign 'Aaa' ratings to the class A-1 through X-A certificates; and 'Aa2' on the A-S classes of notes.
For its part, KBRA intends to assign 'AAA' ratings to classes A-1 through A-s notes; 'AA-' on the class B notes; 'A-' on the class C notes; and 'BBB' through 'B' on classes D through G.
All of the notes have a rated final distribution date of February 2056.
