Citigroup is marketing $913.4 million of commercial mortgage bonds with heavy exposure to retail properties.
The transaction, CGCMT 2016-P6, is collateralized by 54 commercial mortgage loans secured by 94 properties, according to Kroll Bond Rating Agency and Fitch Ratings.
These properties are located in 28 states and Washington DC, with three states that represent more than 10% of the pool balance: California (16.6%), New York (14.5%), and Virginia (10.1%).
Three of the property types represent more than 10.0% of the pool balance: retail (33.6%), mixed-use (26.8%), and office (18.9%).
The loans have principal balances ranging from $2.3 million to $75.0 million for the largest loan in the pool, 8 Times Square & 1460 Broadway (8.2%) in New York City. The top five loans, which also include 681 Fifth Avenue (6.3%), Quantum Park (5.5%), Potomac Mills (4.0%), and Walgreens Net lease Portfolio 6 (3.8%), represent 27.8% of the initial pool balance, while the top 10 loans represent 44.9%.
Citigroup Global Markets Realty contributed 17 loans representing 36.7% of the pool balance; other top mortgage sellers include Barclays Bank (15 loans, 27.6%), Starwood Mortgage Funding (11 loans, 16.2%), Principal Commercial Capital (6 loans, 10.7%), and Société Générale (5 loans, 8.7%).
The securitization trust will issue 19 classes of certificates will be issued, of which fourteen classes are entitled to principal and interest, three classes receive interest-only, one class is entitled solely to excess interest, and one class is a residual interest.
The pool is highly leveraged compared with recent CMBS conduits; Kroll puts the weighted average in-trust loan-to-value ratio at 102% is above the average of the 17 deals it has rated KBRA over the last six months.
The LTV is even higher, at 108.9%, by Fitch’s calculation. And it would be even higher if not for the inclusion of two loans representing 6.5% of the pool, with credit characteristics commensurate with investment grade rated obligations: Potomac Mills, a regional mall and outlet center in Woodbridge, Virginia and Easton Town Center, a super-regional mall in Columbus, Ohio.