A portfolio of commercial mortgages on mostly multifamily properties will secure the CMBS deal that will sell $721.3 million in notes to investors, in a deal slated to come to market and close by December 7.
Thirty-one loans collateralized the conduit transaction, which will issue notes and repay investors through seventeen tranches, according to ratings analysts from Kroll Bond Rating Agency. Eleven of the note classes are entitled to principal and interest and have a rated final distribution date of December 2056. Also, all of the loans are full-term, interest-only.
Five of the classes receive interest-only and one class is a residual interest, according to KBRA.
Just two of the loans have existing additional debt, representing 11% of the pool. The pool has an in-trust appraisal loan-to-value ratio of 54.5%. On a pooled trust basis, the deal has an LTV ratio of 81.5%, which S&P Global Ratings considers moderate.
The loans finance 33 properties, of which 34% are multifamily properties in terms of the pool concentration. Barclays Capital Real Estate, Starwood Mortgage Capital, Societe Generale, and LMF Commercial are among the transaction's mortgage loan sellers and sponsors.
Geographic diversity is also another one of the transaction's strengths, according to S&P, with New York accounting for the largest concentration, at 33.6%. Pennsylvania follows with a 24.0% representation in the pool, or five properties; and Texas, at 17.3%, or four properties, according to S&P.
Another positive aspect of the properties' geographical distribution is the quality of the markets themselves. Some 71.0% of the properties are located in primary markets, 19.5% are in secondary markets, while 9.5% are located in tertiary markets.
S&P says that it will assign ratings of 'AAA' to classes A2 through XA, while the AS notes will receive an 'AA-' rating, among the principal and interest notes. KBRA, meanwhile, says it will assign ratings of 'AAA' on the A2 through AS notes; 'AA' to the class B notes; 'A' to the class C notes; and 'A-' to the class D notes to the principal and interest notes. Classes E through H will receive ratings of 'BBB' through 'B'.
Among the interest-only certificates, KLBRA assigns 'AAA' to the classes XA and XD notes; while the classes XF through XH will be rated 'BBB-' through 'B'.
