Two CMBS deals entered the new issue pipeline last week, adding to what could be the busiest December since the financial crisis. 

Analysts at Bank of America Merrill Lynch said report published today that the seasonally strong year-end performance of CMBS has been much more pronounced this year than in each of the past three years. They noted that around $5.4 billion has been issued so far this month, more than twice the issuance volume seen in the past two Decembers.  

A conduit offering led by JP Morgan and a new single borrower transaction led by Goldman Sachs entered the CMBS pipeline late last week, which will bring year to date issuance total to $48 billion, according to Standard & Poor’s.

JP Morgan is marketing its $1 billion JPMCC 2012-LC9. The deal includes $750 million in publicly placed commercial real estate securities, with the rest of bonds being privately place, according to the term sheet.

JP Morgan Chase is sole bookrunner on the deal; Ladder Capital and Wells Fargo Securities are co- managers on the deal. The deal is expected to price on Friday.

In September the bank priced its $1 billion JPMCC 2012-C8 conduit deal. The 9.75-year benchmark Triple A piece priced at swaps plus 88 basis points and a 2.69-year piece of the deal priced at swaps plus 25 basis points, while a 4.88-year slice priced at swaps plus 50 basis points and a 7.36-year priced at swaps plus 75 basis points.

CMBS spreads have rallied significantly over the past three weeks and have reached their tightest level since mid-2008, according to BofAML analysts. The benchmark super-senior spreads are 30 basis points tighter, and 20 basis points tighter in the past week, ending last Friday at 145 basis points over mid-swaps, the tightest level since mid-2008.

Analysts at the bank said that investor demand for yield has also meant that pricing remains strong down the capital structure. In new issues, subordinate bonds have held in well despite heavy supply. According to BofA, benchmark double-A and triple-B spreads have tightened by 5 basis points and 25 basis points, respectively, to 180 basis points and 410 basis points over this time period, while spreads on single-As are unchanged at 250 basis points.

 On the latest conduit deal, the publicly offered tranches, which include the class A-1, A-2, A-3, A-4,A-5, A-SB and X-A tranches, have all been assigned preliminary ‘Aaa’/ ‘AAA’ ratings by Moody’s Investors Service and S&P respectively. The tranches are also structured with 30% credit enhancement.

On the private placement side, buyers will get access to a broader credit spectrum. The deal offers X-B, A-S, B, C, EC, D,E,F,G tranches that have been rate ‘A1’/ ‘A+’, ‘Aaa’/ ‘AAA’, ‘Aa2’/ ‘AA’, ‘A2’/ ‘A+’, ‘A1’/ ‘A+’, ‘Baa’/ ‘A-‘, ‘Baa3’/ ‘BBB’, ‘Ba2’/ ‘BB+’ and ‘B2’/ ‘BB-’ respectively.

The properties backing the loans are a mix of retail, office, hotel, industrial, multifamily and mixed use commercial real estate.

On the single asset CMBS side, Goldman Sachs began marketing its CMBS deal backed by Bridgewater Commons, a three-story, 992,561 square foot super-regional mall and adjacent lifestyle center located in Bridgewater, New Jersey.  

Kroll Bond Ratings will rate the $300 million deal. The class A, X-A, X-B notes have all been assigned a preliminary ‘AAA’ rating. The class B, C and D notes will be rated ‘AA-‘, ‘A-‘ and ‘BBB’ respectively.

The property offers three anchors and over 150 tenants that are predominately comprised of national retailers, including six major tenants totaling 117,589 square feet, according to the Kroll presale report on the deal. The three anchors are Macy’s which occupies  223,222 square feet, Bloomingdale’s, with 150,525 square feet, and Lord & Taylor, with 129,129 square feet. Bloomingdale’s is part of the collateral while Macy’s and Lord & Taylor own their own stores, including the underlying land.

Proceeds from the deal will be used to refinance existing debt totaling $124.4 million, pay $1.1 million in closing costs, and return $174.5 million of equity to the sponsors. 

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