CIBC World Markets is bringing to market a $201 million sale-leaseback deal from JJH Equipment Trust, a special purpose trust established to fund the acquisition and leaseback of three gas processing plants - Jedney 1, Jedney Expansion, and Highway - found in the northeastern part of British Columbia.
The equipment (glass plants) will be leased to Westcoast Gas Services Inc. (WGSI), a wholly-owned subsidiary of energy services firm Westcoast Energy Inc. (WEI). WEI is a guarantor on the transaction. Dominion Bond Rating Service rated the deal A (low).
Merrill Lynch Mortgage Loans is in the market with a new CMBS deal that consists of 55 mortgage loans totaling C$248.7 million (C$221.9 million to the public).
The offering is divided into four classes of securities: Class A-1, C$83.4 million AAA-rated, maturing in Sept. 2010 with an average life of 6.0 years; Class A-2, C$123.6 million AAA-rated, maturing in April 2010, with an average life of 9.7 years; Class B, C$7.5 million AA rated, maturing in May 2011, with a 9.9 yr average life; and Class C, C$7.5 million A-rated, maturing in Dec. 2012, with an average life of 11.2 years.
Approximately C$30 million in securities rated lower than A will be sold privately, possibly to GMAC Commercial Mortgage of Canada, who contributed about 10% of the collateral pool.
Price talk on the deal is +70 for the C$83.41 million AAA fast-pay tranche and +100 for the C$ 123.65 million slow-pay tranche. Sources say the deals look like good value at those levels, and compare well to Merrill's previous CMBS deal.
The geographic breakdown of the loans is: 35.3% Ontario (16 loans), 21.4% Quebec (11 loans), 17.2% BC (10 loans), 15.1% Alberta (9 loans), and 11% others (9 loans). The properties in the pool are 42.1% retail, 16.0% office, 13.8% self-storage, 12.4% hospitality, 8.8% multi-family residential, and 4.7% industrial.
Marketing for the deal began last Thursday. Monday the road show will be in Montreal and Vancouver, with one-on-ones scheduled for Tuesday. Books are expected to open on Thursday afternoon, with pricing anticipated on May 17. Price guidance will be released after the Thursday lunch in Toronto.
Still in the works are CMBS deals from TD, which sources say may likely come in July, and a deal from CIBC.