CMLS Financial closed Canada’s first hotel-backed CMBS, a $400 million deal that collateralized by single loan, which is secured by five Westin Hotels located in key Canadian markets.

This is the first time that a hotel portfolio was financed by way of a CMBS securitization in Canada, according to a CMLS press release. The issuer said the deal is also the first single borrower CMBS transaction since 2006 and the largest since 2007.

DBRS assigned the deal final ratings of ‘AAA’ to $230 million of notes issued under the structure; ‘AA’ ratings to the $25 million class B notes; ‘A’ ratings to the $40 million class A notes and ‘BBB’ ratings to $105 million of the notes.

The mortgage loan has a five-year term and amortizes on 30-year schedule with an estimated 4.58% interest rated, according to the DBRS presale report. Starwood Capital Group is the loan sponsor.

"The financing is testament to the re-emergence of the CMBS market in Canada and we see this as another key milestone," says Glen Malcolm, senior vice president at CMLS Financial.  

RBC Dominion Securities and JP Morgan are lead underwriters on the deal.

CMLS Financial is an independently owned mortgage lender wide range of commercial mortgages, residential mortgages, and institutional services.  The issuer did not disclose pricing details on the deal.

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