The first two commercial mortgage securitizations of 2015, a $1.1 billlion conduit and a $200 million single-asset deal, launched Thursday,
Morgan Stanley and Bank of America Merrill Lynch plan to issue $1 billion of commercial mortgage backed securities via a jointly led conduit dubbed MSBAM 2015-C20.
A portfolio of 88 mortgage loans secured by 102 multifamily and commercial real estate properties serve as collateral. Most of the properties (62.8%) are located in in five states including California, Texas, Florida, New York and North Carolina.
The $170 million Discover Business Center loan makes up 9.6% of the pool, makingit the largest loan in the portfolio. This loan has a 10-year term and is secured by a 1,287,820 square foot office portfolio located in Irvine, Orange County, CA.
The conduit deal features eighteen loans that are secured by hotels, which represent 20.6% of the pool, including four of the top 15 loans.
DBRS and Morningstar are rating the deal. On offer are $803 million of super senior, triple-A rated, class A notes and $79 million of senior class, triple-A rated notes. The class B notes are rated A’/ AA-’ and the class C notes are rated A’/ A-’.
More than half (55) of the 88 loans in the pool pay only interest for a period of the loan term — 8 loans pay interest for their entire term and 47 loans are structured with interest-only periods ranging from 12 months to 60 months.
Midland Loan Services, a division of PNC Bank, National Association is acting as master servicer and CW Capital Asset Management is acting as special servicer.
The first single-asset securitization of the year come from Citigroup and Barclays, which are marketing $200 million of bonds backed by a single commercial mortgage on 101 Avenue of the Americas, a 23-story office building in Manhattan’s Hudson Square neighborhood.
The securitization trust, CGCMT 2015-101A, will issue eight classes of notes; Fitch Ratings has assigned a preliminary AAA’ rating to the two senior tranches, both of which benefit from credit enhancement of 52%.
The certificates represent the beneficial interests in the mortgage loan securing the 99-year leasehold interest in the 434,094 square foot building, which is owned by Trinity Church. This loan pays only interest for its entire term. Fitch measures its debt service coverage ratio at 0.95x and its loan to value ratio at 93.1%.
Proceeds of the loan were used to refinance existing debt, fund up-front reserves and pay closing costs. The certificates will follow a sequential-pay structure. The property was gut renovated between 2011 and 2013 including upgraded building systems as well as a new lobby, restrooms, and green roof terrace. The building is LEED Silver certified.
The property is 94.5% leased to seven tenants as of October 2014. The largest tenant at the property is the New York Genome Center (31.9%), which took occupancy in late 2013 on a 20-year lease scheduled to expire in September 2033. The second largest tenant, Two Sigma (31.9%) began its initial 15-year lease in January 2014 and has subsequently expanded to an additional four floors, with new leases commencing in February and April of 2015.
