Citigroup is marketing $771 million of commercial mortgage bonds backed by 37 loans secured by 75 properties, according to Kroll Bond Rating Agency.
The portfolio backing CGCMT 2016-P3 is less highly leveraged than many conduits that Kroll has recently rated, with a weighted average in-trust loan-to-value ratio of 100%; however this weighted average is skewed by the inclusion of a loan, 225 Liberty representing 5.3% of the pool balance with unusually low leverage of 57.7%. The loan is unrated by has credit characteristics consistent with a ‘BBB+’ rated obligation when analyzed on a standalone basis, according to Kroll.
Excluding this loan, the pool’s weighted average LTV, as calculated by Kroll, is 102.3%.
The loans have principal balances ranging from $2.0 million to $65.0 million for the largest loan in the pool, Empire Mall (8.4%), a 1.1 million square foot, super regional mall located in Sioux Falls, South Dakota. The top five loans, which also include Marriott Midwest Portfolio (7.1%), Nyack College NYC (7.1%), 600 Broadway (6.5%), and 79 Madison Avenue (5.8%), represent 35.0% of the initial pool balance, while the top 10 loans represent 61.3%
Six mortgage loan sellers sold loans to the trust: Citigroup Global Markets Realty (11 loans, 23.8%), Natixis Real Estate Capital (8 loans, 22.8%), Société Générale (8 loans, 21.4%), Principal Commercial Capital (six loans, 19.9%), The Bank of New York Mellon (1 loan, 6.5%), and Walker & Dunlop Commercial Property Funding I WF, LLC (3 loans, 5.6%).
There are three property types that account for more than 20.0% of the pool balance, office (31.3%), retail (24.7%), and lodging (20.5%).
CGCMT 2016-P3, will issue 17 tranches of notes; Kroll expects to assign an ‘AAA’ rating to the super senior tranches, which benefit from credit enhancement of 30% and to the junior senior tranche with credit enhancement of 24.75%.