Cohen Financial Services is readying a $567.4 million offering of bonds backed by mortgages on office, retail and apartment buildings in a state of transition, according to Moody’s Investors Service.

The transaction, dubbed PFP 2017-3, is the firms’ third commercial real estate collateralized loan obligation.

Moody’s and Kroll Bond Rating Agency expect to assign an Aaa rating to the 314.9 million senior tranche, which has an assumed coupon of one-month Libor plus 140 basis points.

It is not rating the six subordinate tranches of notes, which have assumed coupons ranging from Libor plus 200 basis points to Libor plus 600 basis points, or to the preferred shares.

Among the Moody’s primary ratings concerns, the loans in the collateral pool are highly leveraged; they have an average loan-to-value ratio, as calculated by Moody’s, of 127.3%.  

The loans have a weighted average life of 4.8 years, but will amortize very little during this period; all of them pay only interest, and no principal, for at least part of their terms.

The collateral is also relatively concentrated in a few property types: 36.5% of the initial pool of loans is secured by office properties and 33.6% by multifamily properties. 

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