Bank of America Merrill Lynch and Deutsche Bank Securities priced $440 million of commercial mortgages bonds backed by a loan that is secured by Independence Plaza in New York City, according to Morningstar.
The deal, BAMLL 2014-IP, issued the $315 million class A, triple-A rated notes at a swaps plus 60 basis points, according to a person familiar with the deal. The $35 million, double-A rated class B notes issued under BAMLL 2014-IP, priced at swaps plus 83 basis points.
The $25 million, single-A rated, class C notes priced at swaps plus 100 basis points and the $40 million, triple-B, class D notes priced at swaps plus 125 basis points. The $25 million, triple-B rated, class E notes priced at swaps plus 160 basis points.
All of the notes have a weighted average life of four years.
Independence Plaza, developed in 1975 under the MitchellLama Housing Program —which provides affordable rental housing to moderate and middle income families — is a 1,328 multifamily property that includes rent subsidized, Section 8 apartments. Almost 60% of the units are rent controlled.
However the sponsors (Bank of America and German American Capital) had the property’s rent regulated status overturned in court and on April 15, 2014 received a 24.8% increase in Section 8 rents, according to the presale report. Morningstar expects that rents at the property will “grow significantly as they are reset to market levels.”