Morgan Stanley and Bank of America are back this month with a $1.5 billion offering of commercial mortgage backed securities from their so-called MSBAM conduit.
The deal, MSBAM 2014-C19, is backed by 77 fixed rate commercial mortgage loans that are secured by 114 properties, according to Kroll Bond Ratings.
The pool has a weighted average loan to value (LTV) ratio of 96.8%, lower that the last 17 conduits rated by Kroll in the last six months. However, according to the presale report, equity in the pool is boosted mainly by two loans which have relatively low LTVs of 48.1% and 48.3%. Without the loans, the LTV for the pool would rise to 104.5%.
Loans were contributed by Bank of America, National Association (34 loans, 42.0%), Morgan Stanley Mortgage Capital Holdings LL (18 loans, 38.2%) and CIBC (25 loans, 19.7%). The majority of the loans, or 63.5%, were used to refinance existing debt.
The properties securing the loans are located in 29 states, the Commonwealth of The Bahamas, the Commonwealth of Puerto Rico, and Ontario, Canada. There is exposure to all of the major property types, but retail represents the largest at 25% of the pool, followed by office at 24%, multifamily at 17.1%, and lodging at 15.6%. The loans have principal balances ranging from $2.3 million to $133.0 million for the largest loan in the pool, Koll Airport Business Center, a 1.2 million square foot, Class-B flex office complex located in Irvine, California.
The largest retail loan is TKG Retail Portfolio B, which is secured by four anchored centers located in Oklahoma, Virginia, Ohio and Colorado, according to the presale report. Each of the four centers is anchored or "shadow-anchored" by a Target or Walmart Supercenter.
Morgan Stanley and BofAML last priced securities issued from the CMBS conduit in September. The bank sold the 10-year, triple-A notes from the $911 million offering at a spread of swaps plus 82 basis points.