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Canadian pipeline kicking off in 2004

Two deals are making the rounds in Canada, supporting the view that 2004 will be another record year for the sector.

Schooner Trust Series 2004-CCF1 is kicking off the first Canadian CMBS transaction in 2004, and the fifth transaction for Solar/Schooner, according to offering documents.

With a principal amount of $474 million, this is one of the largest transactions done in the Canadian CMBS market.

Meanwhile, Falcon Trust announced the upcoming issuance of the Series 2003-SMU, which will be its second securitization deal after the successful issuance last year of the Series 2002-SMU.

Schooner is comprised of 75 loans on 78 properties. Commercial Mortgage Origination Co. of Canada - a subsidiary of the TD Bank - provides 52 loans or 58.2% of the pool; Commercial Mortgage Origination Company of Canada. - a subsidiary of Credit Suisse Group - 17 loans or 35.9% of the pool; and First National Financial Corp., 6 loans or 5.9% of the pool.

The tranches A-1, A-2, B and D-1 will be offered to institutions while the tranche C will be sold to retail investors. The triple-A tranches have the typical structure of a Canadian conduit with the A-1 being an 8.9-year with an average life of five years while the A-2 is a 9.8-year quasi-bullet.

As for Falcon, that deal is comprised of 45 loans from the industrial sector. The sponsor of the Trust, Summit REIT, is the only industrial-focused REIT in Canada. A triple-A tranche worth $125.6 million is offered with a 6.9-year maturity and a 6.8-year average life.

Unique to Falcon deals, the end borrower, which is Summit REIT, is also the owner of the properties.

The loans are concentrated in three provinces: Ontario (44%), Alberta (41%) and Quebec (14%). The properties are all in major urban areas: Toronto, Calgary, Edmonton and Montreal.

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