The CMBS pipeline keeps building. Yesterday Morgan Stanley and Bank of America Merrill Lynch began marketing $1 billion of securities backed by 65 fixed-rate commercial mortgage loans that are secured by 100 properties, according to Kroll Bond Ratings Agency.
The loans issued from the trust, MSBAM 2014-C18 have principal balances ranging from $2.1 million to $106.6 million for the largest loan in the pool, TKG Retail Portfolio A (10.3%), which is secured by four anchored retail centers in Colorado, Pennsylvania, and Louisiana.
The top five loans, also includes 300 North LaSalle (9.7%), Huntington Oaks Shopping Center (5.9%), Ashford Hospitality Portfolio C1 (5.7%), and Bovet Office Center (4.6%), represent 36.2% of the initial pool balance.
Approximately 67% of the pool is comprised of of loans with 10-year terms, ten loans (28.7%) have five-year terms, one loan (3.0%) has a 12-year term, and one loan (0.5%) has a seven-year term. Most of the loans or 79.5% of the pool is comprised of loans with interest only periods, 32 (58.3%) are partial- term IO and 7 (21.2%) are full-term IO.
The overall pool has a weighted average LTV of 98.5%, which KBRA said is lower than the average of the 18 CMBS conduits it rated over the last six months. These transactions had in-trust KLTVs ranging from 94.0% to 106.0%, with an average of 101.2%.
However, the pool has exposure to 35 high leverage loans with KLTVs in excess of 100% (63.6%), which is higher than the average of the conduits deals KBRA rated in the last six months. The exposure to high leverage loans in these transactions ranged from 49.4% to 73.2%.
Also announced yesterday is a $1.4 billion CMBS conduit issued by JP Morgan and Barclays. The deal is collateralized by 65 commercial mortgage loans that are secured by 101 properties.
KBRA has assigned preliminary ratings to the deal, JPMBB 2014-C23. The transaction has exposure to all of the major property type segments. The four largest exposures include multifamily, office, retail and lodging.
The transaction pool is comprised of loans ranging from $2.2 million to $105.0 million for the largest loan in the pool, which is secured by 17 State Street (7.7%), a 560,210 sf, 42-story, Class-A office building located in the downtown area of New York City’s Manhattan borough.
The loan terms vary: 53 loans have 10-year terms (76.7%), and the remainder of the pool is comprised of loans with five-year (ten loans, 18.6%), seven-year (one loan, 3.0%), and 20-year (one loan, 1.6%) terms.
Over half or 76.4% of the pool is comprised of interest only (IO) loans, which includes full-term IO (six loans, 24.5%) and partial term IO (30 loans, 51.9%) loans.
The overall pool has a weighted average LTV of 102.5%, higher than the last 18 CMBS conduits rated by KBRA over the past six months, which had LTVs ranging from 94.0% to 106.0%, with an average of 101.2%. The pool also has a significant concentration of high leverage loans with LTVs in excess of 100.0% (69.2%).