Citigroup is readying a $1.23 billion of commercial mortgage bonds,according to a presale report published by Fitch Ratings.
The deal, Citigroup Commercial Mortgage Trust Series 2014-GC23, is backed by 83 loans secured by 99 properties throughout the U.S. The pool contains a traditional mix of property types, including retail (32.8%), hotels (17.1%) mixed-use (12.6%), and office properties (11.6%). These properties are geographically diverse, with locations in New York, California, and Texas.
Fitch assigned preliminary AAA’ ratings to several tranches of notes, including the $49.64 million class A-1 notes, the $85.8 million class A-2 notes, the $300 million class A-3 notes, and the $345.24 million class A-4 notes. These classes all benefit from a 30.0% credit enhancement and mature in July 2047.
The underwriters for the deal are Citigroup Global Markets and Goldman Sachs.
Among the deal’s strengths, according to Fitch, is the fact that its debt service coverage and loan to value ratio, as calculated by the rating agency, are 1.25x and 99.4%, respectively; that’s, are better than the 2013 and 2014 year-to-date averages of 1.29x and 101.6% and 1.19x and 105.6%, respectively.
Also, none of the loans in the pool have subordinate debt in place.
However, the pool has a significantly above-average proportion of interest-only loans (24.4% of the pool balance versus the 2013 average of 17.1%) and above-average concentration of partial interest loans (43.7% versus the 2013 average of 34.0%). The pool is scheduled to amortize 11.0% prior to maturity.