Credit Suisse’s first commercial mortgage securitization of 2016, to be issued from its CSAIL trust, pools a considerably smaller number of loans relative to the sponsor’s previous two deals.
A smaller pool creates greater concentration of risks for investors.
CSAIL 2016-C5 Mortgage Trust pools 59 loans; by comparison the sponsor’s previous two deals, CSAIL 2015-C4 and 2015-C3 pooled 87 and 89 loans respectively.
The top 10 loans represent 53.3% of the pool, which is higher than the 2015 average top 10 concentration of 49.3%, according to Fitch Ratings.
CSAIL 2016-C5 Mortgage Trust will sell a total of $936 million in commercial mortgage backed bonds.
Fitch Ratings assigned preliminary a ‘AAA’ rating to the super senior notes, which benefit from 30% credit enhancement; it also assigned an ‘AAA’ ratings to the junior senior notes, which benefit from 22.75% credit enhancement.
The pool's largest concentration by property type is multifamily, at 25.8%, followed by industrial properties, at 21.5%. Hotels make up 21.2% of the pool. According to Fitch, the industrial concentration is above the 2015 average of 4.2%; the hotel concentration is above the 2015 average of 17.0% for other Fitch-rated fixed-rate multi-borrower transactions.
The largest loan in the pool, GLP Portfolio Pool A (9.3%), received a credit opinion of ‘Asf’ on a stand-alone basis. The loan is secured by 114 industrial properties across nine states in 11 markets. As a result, the collateral pool’s stressed loan-to-value ratio of 106.1% is below the 2015 average of LTV of 109.3%.
Five loans representing 27.5% of the pool pay only interest, and no principal, for their entire terms. This is higher than the 2015 average of 23.3% for other Fitch-rated multi-borrower transactions. There are 32 loans, representing 49.6% of the pool, that pay only interest for part of their terms.