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 Mitchell–Lama 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.”

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.