Cantor Commercial Real Estate Lending, German American Capital Corporation and KeyBank are sponsors on the latest CMBS conduit to come to market.
Kroll Bond Rating Agency has assigned preliminary ratings to the deal, COMM 2013-CCRE7 that is collateralized by 59 fixed rate commercial mortgage loans that are secured by 87 properties, according to the presale report.
Twenty-three classes of certificates will be issued, of which 18 classes are entitled to principal and interest, two classes receive interest-only, one class receives only excess interest, and two classes are residual interests.
KBRA assigned ‘AAA’ ratings to 10 classes of notes; the capital structure will also issue notes ranging from ‘AA-‘ to ‘B’.
The loans have principal balances ranging from $1.8 million to $130.0 million for the largest loan in the pool, which is secured by the fee simple interest in Moffett Towers Phase II (13.9%), a 676,598 sf office complex located in Sunnyvale, California.
Also counted among the top five loans is Lakeland Square Mall (7.5%), Larkspur Landing Hotel Portfolio (6.4%), One West Fourth Street (5.5%), and North First Commons (5.3%). According to the KBRA presale, together these loans account for 38.6% of the initial pool balance.
Almost half of the underlying collateral properties by pool balance (29 properties, 48.6%), are located in markets that KBRA considers primary. “This is above the average primary market exposure of the last 10 conduits we rated that ranged from a low of 23% to a high of 61%, with an average of 45%,” the analysts noted.
However the overall pool has a weighted average in-trust KLTV of 97.3% and an all-in KLTV of 106.1%. KBRA said that the in-trust leverage level is among the highest of the 10 conduits the ratings agency has rated since September 2012, which ranged from 89.4% to 97.8%, with an average of 93.8.
“Higher leverage implies lower borrower equity levels, greater default probability, and higher overall loss severity should a default occur,” said analysts in the presale report.