Citigroup and Goldman Sachs priced $652.3 million of commercial mortgage bonds via the CGCMT 2014-GC25 conduit wider than levels paid on the last deal to come to market on Oct. 9.
The conduit was rated by Moody’s Investors Service, Fitch Ratings, Kroll Bond Ratings and DBRS. The Aaa’/ AAA’/ AAA’/ AAA’, 10-year super senior notes priced at a spread of swaps plus 87 basis points, according to a deal document. That was four basis points wider than the super senior notes issued from last CMBS conduit to price, JP Morgan’s $1.3 billion conduit JPMBB 2014-C24.
The senior, triple-A rated, 10-year bonds priced at 125 basis points, compared to spread of 110 basis points paid on the comparable JP Morgan bond.
At the junior level, the story was the same for the Citi/Goldman deal; the bonds priced 25 to 35 basis points wider than the JP Morgan conduit. The AA-’/ ’AA’/ AA’, 10-year class B tranche, priced at 157 basis points; and the A-’/ A-’/ A’, 10-year class C tranche priced at 205 basis points. Moody’s did not rate these notes.
CGCMT 2014-GC25 is backed by a collateral pool has exposure to all the major property types, with three that represent more than 10.0% of the pool balance: office (35.6%), retail (26.3%) and student housing (16.2%).
The notes are backed by 58 fixed-rate commercial mortgage loans that have balances ranging from $1.6 million to $110.0 million for the largest loan in the pool, Bank of America Plaza (13.1%), a 1.4 million square foot Class-A office building in downtown Los Angeles, California.
The top five loans, which also include Multi-State Retail Portfolio (7.4%), Fenley Office Portfolio (7.1%), The Heights at State College (7.0%), and 6010 Bay Parkway (5.8%), represent 40.4% of the initial pool balance, while the top 10 loans represent 59.7%. The Heights at State College is a 291-unit, 849-bed, Class-A, student housing complex located in State College, Pennsylvania, approximately 1.5 miles south of Pennsylvania State University.
Most of the loans have 10-year terms; two loans or 1.0% of the pool, have five-year terms. The majority of the loans, or 75% of the pool, pay interest only; either for part of their terms (59.8%) or their full terms (15.2%).