Two similar commercial mortgage-backed securities deals being marketed last week across Canada have created a glut of supply, which forced one transaction to postpone pricing.
A C$189.5 million offering from Solar Trust via lead TD Securities was originally scheduled to price Oct. 11, but has been pushed back to sometime this week. A C$251 million deal from N-45 First CMBS Issuer Corp. with assets from Case-New Holland as collateral was scheduled to price last Friday, though at press time, no details were available. Scotia Capital Markets was serving as lead underwriter for the N-45 deal.
"Two similar deals marketing at the same time may be more supply than the market is willing to absorb right now," said a Canadian market observer.
According to Bill Furlong, managing director of asset securitization at TD Securities, there are investors looking at the properties in the Solar Trust deal. "We're going to wait a little bit and let that [the N-45 deal] clear away, because there's two competing deals in the market," he said. "It's a bit of a rough go right now, due to turbulence in the secondary markets, but we have every confidence that we will prevail; the deal will get done."
As for the N-45 deal, which is currently in roadshow in the western half of the country, interest seemed only evident for the C$80 million to $90 million triple-A rated tranche, suggesting it could be a slow seller.